Alternatively, if all interest was expensed upfront, the company might not make the most use of the deduction as it may not have income to offset the expense against. In the example there is a specific 6.00% loan facility of 100,000 which leaves 143,750 (243, ,000) to be funded by the general loan facilities at the weighted rate of 7.75% (see Step #2). The total of the weighted amounts is 243,750...