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Zahir company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $900,000 on March 1, $600,000 on

  1. Zahir company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $900,000 on March 1, $600,000 on June 1, and $1,500,000 on December 31. Zahir company borrowed $500,000 on March 1 on a 5-year, 12% note to finance the construction of building. In addition, the company had outstanding all year a 10%, 5-year $1,000000 note payable and an 11%, 4-year, $1,750,000 note payable. Compute the following:
  1. Weighted-average accumulated expenditure
  2. Capitalization rate used for interest capitalization purpose
  3. Avoidable interest

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