X Co constructed a new factory for itself. The costs incurred on the construction project were as follows:

Additional information:
(i) Construction work actually began on 1 February 2024, and a loan of £9m was taken out on the same date specifically to help finance the project. Interest on the loan is payable at a fixed annual rate of 6%. The loan is repayable in full on 31 January 2029.
(ii) Building work was completed on 31 October 2024, at which point the factory was ready for use by X Co.
Required:
Calculate the total capital expenditure in relation to the new factory.

Transcribed Image Text:

Architect's fees (including 75,000 for an initial design that was rejected and dis- carded by X Co) Costs of applying for and obtaining planning permission Purchase of the site Cost of demolishing the existing building that was on the site Sundry income earned while the site was used as a car park before construction began Building materials (including 374,000 of recoverable VAT) Construction labour costs (including 0.4m incurred when staff were on strike from 1 to 30 June 2024, during which time no construction work whatsoever took place) Consultancy fees for testing factory processes before the building was completed Revenue from sale of products produced as a result of the testing process Costs of relocating staff who are to work in the new factory Loan interest (see note (i)) Costs of the formal ceremony to mark the opening of the new factory, attended by local dignitaries '000 415 22 9,500 600 (45) 2,244 3,100 380 (70) 568 495 31