Q 10.30:On March 1, a firm took out a $2 million construction loan at 8% interest. The firm's only other outstanding debt for the year was a $1 million note payable at 10% interest. If the firm uses an 8% interest rate when calculating its avoidable interest, then it must have had weighted-average accumulated expenditures of:

A. Exactly $2 million

B. $1 million or more

C. Exactly $1 million

D. $2 million or less

How did they derive this answer? Please show all steps.