In building a highway, the district engineer is faced with the alternatives of building a 4-lane underpass that would take care of all future needs of building or a 2-lane underpass now and a second underpass 20 years later. For the 4-lane underpass: First cost = ₱ 400,000 Annual maintenance cost = ₱ 10,000 No salvage value For the 2-lane underpass: First cost = ₱ 270,000 Annual maintenance cost = ₱ 8,000 No salvage value Which of the following gives us the best alternative that should be adopted by showing the difference of its equivalent present worth
In building a highway, the district engineer is faced with the alternatives of building a 4-lane underpass that would take care of all future needs of building or a 2-lane underpass now and a second underpass 20 years later. For the 4-lane underpass: First cost = ₱ 400,000 Annual maintenance cost = ₱ 10,000 No salvage value For the 2-lane underpass: First cost = ₱ 270,000 Annual maintenance cost = ₱ 8,000 No salvage value Which of the following gives us the best alternative that should be adopted by showing the difference of its equivalent present worth
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In building a highway, the district engineer is faced with the alternatives of building a 4-lane underpass that would take care of all future needs of building or a 2-lane underpass now and a second underpass 20 years later.
For the 4-lane underpass:
First cost = ₱ 400,000
Annual maintenance cost = ₱ 10,000
No salvage value
For the 2-lane underpass:
First cost = ₱ 270,000
Annual maintenance cost = ₱ 8,000
No salvage value
Which of the following gives us the best alternative that should be adopted by showing the difference of its equivalent present worth
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