Question

Martinez Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $7,500,000 on January 1, 2020. Martinez expected to complete the building by December 31, 2020. Martinez has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semi-annually, issued December 31, 2019, $3,000,000 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021, 2,100,000 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 1,500,000
Compute the avoidable interest on this project.

Answer 1

Answer:

$530,672

Explanation:

Base on the scenario been described in the question, we can use the following method to compute the avoidable interest on this project

Use the attached file below to find the solution to given problem .