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    • Question

      A company borrows ₹100 lakh at 10% interest to

      construct an asset over 2 years. It spends ₹60 lakh in Year 1. What borrowing cost is capitalized in Year 1?
      A ₹12 lakh Correct Answer Incorrect Answer
      B ₹10 lakh Correct Answer Incorrect Answer
      C ₹8 lakh Correct Answer Incorrect Answer
      D ₹5 lakh Correct Answer Incorrect Answer
      E ₹6 lakh Correct Answer Incorrect Answer

      Solution

      Capitalized cost = ₹60 lakh × 10% = ₹6 lakh

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