Using the information in RE10-7 and RE10-8, calculate Dexter's capitalized interest on the student condominium complex for Year 2.
In RE10-7, Dexter Construction Corporation is building a student condominium complex; it started on January 1, Year 1. Dexter borrowed $2.5 million on January 1 specifically for the project by issuing a 10%, 5 year, $2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5 year, $3 million note payable and a 10%, 10 year, $1.8 million note payable outstanding all year. Calculate the weighted average interest rate for Year 2.
In RE10-8, Dexter's beginning cumulative costs for Year 2 were $500,000 and ending cumulative costs were $3,000,000. Calculate Dexter's average cumulative costs.