Textbook Problem

Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed $2.5 million on January 1 specifically for the project by issuing a 10%, 5-vear, $2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, $3 million note payable and a 10%, 10-year, $1.8 million note payable outstanding all year. Calculate the weighted average interest rate on the non-construction-specific debt for Year 1.

RE10-9 Refer to RE10-8. In Year 1, Dexter incurred costs as follows:

Calculate Dexter’s weighted average accumulated expenditures.