General Studies · Borrowing Costs (IAS 23)
Rather than taking out a loan specifically for a new store, Apex Co could have funded the store from existing general borrowings which consist of: (1) a 10% bank loan of $50 million, and (2) an 8% bank loan of $30 million. In this case, what capitalisation rate would be applied to the expenditure on the asset in accordance with IAS 23?
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