Question

joy corp. builds a new office building. the average accumulated expenditures were $2,000,000. joy borrows $1,500,000 on a construction loan specifically to build the office building. the interest rate on the construction loan is 6%. joy also has an additional loan outstanding for $3,000,000, with an interest rate of 8%. what is the amount of interest that joy should capitalize on the self-constructed office building?

Answer 1

Answer: Joy (who is in serious trouble) will owe $90,000 dollars on the office buildings construction and $240,000 dollars on the other loan. Also Joy has gone over her budget $2,830,000 dollars and needs to file for bankruptcy.