Question: [ 11 ] Sun Co. was constructing fixed assets that qualified for interest capitalization. Sun had the following outstanding debt issuances during the entire year

for interest capitalization. Sun had the following outstanding debt issuances during the

[ 11 ] Sun Co. was constructing fixed assets that qualified for interest capitalization. Sun had the following outstanding debt issuances during the entire year of construction: 0 $6,000,000 face value, 8% interest 0 $8,000,000 face value, 9% interest None of the borrowings were specified for the construction of the qualified fixed asset. Average expenditures for the year were $1,000,000. What interest rate should Sun use to calculate capitalized interest on the construction? A. 8.00% B. 8.50% C. 8.57% D. 9.00%

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