Firm X decided to construct a new building for their corporate headquarters. The company made three separate $1,000,000 expenditures related to the construction. The first was expenditure was made on 1/1/1, the second on 7/1/1, and the third on 10/1/1.

To help finance the construction, Firm X took out a 5-year, 12% loan for $1,200,000. Assume the weighted-average interest rate on all the firms other debt is 10%.

On 3/1/2, the firm makes an additional $300,000 expenditure related to the construction of their building. Construction is completed on 9/30/Yr2. Firm X incurred $500,000 of interest costs on all its debt during Year 2. Calculate Firm Xs avoidable interest for Year 2