Question
Vaughn Manufacturing is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6430000 on March 1, $5310000 on
Vaughn Manufacturing is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6430000 on March 1, $5310000 on June 1, and $8450000 on December 31. Vaughn Manufacturing borrowed $3250000 on January 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 11%, 3-year, $6390000 note payable and an 12%, 4-year, $12250000 note payable.
What is the weighted-average interest rate used for interest capitalization purposes?
11.51%
11.66%
12.00%
11.86%
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