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Hi
Just seeking some assistance for General borrowings Mehran Part c takes a weighted average cost of capital which I get however it has worked the borrowing cumulatively each month
So £50k a month for 4 months (£50k)+(£50k+£50k)+(£50k+£50k+£50k)/4 whereas I would just do £50kx4 then multiplied by 9%
Not sure where I am going wrong?
If you refer to study text or notes, I don’t exactly remember, you can find that weighted total expenses are used while calculating the weighted borrowing cost. It is, apparently, mentioned in IAS 23 that the process for calculating the borrowing cost is the same method as used in Mehran.
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