Question
Washington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6,400,000 on March 1, $5,280,000 on
Washington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6,400,000 on March 1, $5,280,000 on June 1, and $8,000,000 on December 31. Washington Company borrowed $3,200,000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $6,400,000 note payable and an 11%, 4-year, $12,000,000 note payable.
What is the weighted-average interest rate used for interest capitalization purposes? (If needed, round to 2 places beyond the decimal point. Example: 14.3834% would be 14.38%)
Group of answer choices
11%
10.85%
10.65%
10.5%
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