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Q4) Hound Co. had a 200.000 $ bank credit (special purpose loan) in order to finance a long-term construction. The interest rate on this loan is %7. The company also had the following loans outstanding as on 1 January 2015 Repayable on (Due date) Loan 1 at 10% Loan 2 at 6% Loan 3 at 8% $ 31 December 2017 31 September 2018 31 March 2017 500.000 300.000 200.000 The company spent the following amounts on construction. On 31 December 2015 construction was in progress. 1 January 2015 300.000 $ 1 March 2015 500.000 $ 1 November 2015 200.000 $ a) Compute the capitalization rate b) Compute the borrowing cost eligible for capitalization