Esinam ltd has borrowed GHS2.4m to finance the building of a factory. Construction is expected to take two years. The loan was taken on 1 January 2014 and work began on 1 March 2014. GHS1m of the loan...

Esinam ltd has borrowed GHS2.4m to finance the building of a factory. Construction is expected to take two years. The loan was taken on 1 January 2014 and work began on 1 March 2014. GHS1m of the loan was not utilised until 1 July 2014 so Esinam ltd was able to invest it until needed. Esinam ltd is paying concessionary interest of 8% per annum on the loan and invests surplus funds at 6% per annum. Calculate the borrowing costs capitalised for the year ended 31 December 2014 in respect of this project

A. GHS130,000
B. GHS192,000
C. GHS100,000
D. GHS162,000