12% bank loan (1.

5 years)
10% bank loan (3 years)
Total Cost

EXPENDITURES
1-Jan 5,000,000
1-Mar 4,000,000
1-Aug 3,000,000
1-Dec 2,000,000

Average Carrying Amount

Capitilization Rate =
=
=

Capitalizable Borrowing Cost

 Principal Borrowing Cost
1,000,000 120,000
8,000,000 800,000
9,000,000 920,000

MONTHS OUTSTANDING AMOUNT

12 60,000,000
10 40,000,000
4 12,000,000
1 2,000,000
114,000,000
-12
9,500,000

920,000/9,000,000

0.102
10.22%

9,500,000 (10.22%)
Php 970,900