Question
Teal Mountain Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1.2 million on March 1,
Teal Mountain Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1.2 million on March 1, $0.9 million on June 1, and $3 million on December 31. Teal Mountain Company borrowed $1 million on March 1 on a five-year, 12% note to help finance the building construction. In addition, the company had outstanding all year a $1-million, five-year, 14% note payable and a $3.7-million, four-year, 16% note payable.
Calculate the appropriate capitalization rate on general borrowings that would be used for capitalization of borrowing costs.(Round answer to 2 decimal places, e.g. 52.75%.)
Capitalization Rateenter Capitalization Rate in percentages rounded to 2 decimal places
%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started