ANSWER
Avoidable Interest | $ 3,82,255 | |||||
Workings: | ||||||
Expenditure for the year | ||||||
Mar-01 | $ 28,80,000 | X | 10 / 12 | = | $ 24,00,000 | |
Jun-01 | $ 19,20,000 | X | 7 / 12 | = | $ 11,20,000 | |
Dec-31 | $ 48,00,000 | X | 0 / 12 | = | $ - | |
$ 96,00,000 | $ 35,20,000 | |||||
Interest Capitalized | ||||||
$ 35,20,000 | ||||||
Less: | $ 16,00,000 | X | 12.00% | = | $ 1,92,000 | |
Balance | $ 19,20,000 | X | 9.9091% | = | $ 1,90,255 | |
Interest Capitalized | = | $ 3,82,255 | ||||
Weighted Average rate of all debt:- | ||||||
$ 32,00,000 | X | 8% | = | $ 2,56,000 | ||
$ 56,00,000 | X | 11% | = | $ 6,16,000 | ||
$ 88,00,000 | $ 8,72,000 | |||||
Weighted Average rate of all debt = | 9.9091% | |||||
($872000 / $8800000) |
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