Business, 24.12.2021 04:30 ybetancourt1

Pharoah Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $9,000,000 on January 1, 2020. Pharoah expected to complete the building by December 31, 2020. Pharoah has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2019 $3,600,000
Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 2,700,000
Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 1,800,000

Assume that Pharoah completed the office and warehouse building on December 31, 2020, as planned at a total cost of $9,360,000, and the weighted-average amount of accumulated expenditures was $6,480,000.

Required:
Compute the avoidable interest on this project.

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