The institute of Electronics and Communications Engineers of the Philippines (IECEP) is planning to put up its own building. Two proposals being considered are: A. The construction of the building now, to cost P500,000 B. The construction of a smaller building now, to cost P300,000 and at the end of 5 years, an extension to be added to cost P300,000 Which option is more cost-effective if the interest rate is 20% and depreciation is ignored, and by how much? Follow the format. 1. Given: 2. Formula: 3. Required: 4. Cash flow Sketch: 5. Solution:

The institute of Electronics and Communications Engineers of the Philippines (IECEP) is planning to put up its own building. Two proposals being considered are: A. The construction of the building now, to cost P500,000 B. The construction of a smaller building now, to cost P300,000 and at the end of 5 years, an extension to be added to cost P300,000 Which option is more cost-effective if the interest rate is 20% and depreciation is ignored, and by how much? Follow the format. 1. Given: 2. Formula: 3. Required: 4. Cash flow Sketch: 5. Solution:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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