A man wants to have a building to be used as a university, and he has two options. The first one is to build it with a first cost of P10M and a salvage of P 450,000 at the end of 30 years. Its annual operating cost is PO.5M, while the repair and maintenance cost is P1M for every 10 years and thereafter while the replacement cost is P IM for every 15 years and thereafter. The second option is to rent a building with the following pattern of annual rental cost shown in the table every 5 years and thereafter. If the interest is 24% cpd. weekly, what is the Capitalized Cost of the 2nd Option? Year 1 3 4 5

A man wants to have a building to be used as a university, and he has two options. The first one is to build it with a first cost of P10M and a salvage of P 450,000 at the end of 30 years. Its annual operating cost is PO.5M, while the repair and maintenance cost is P1M for every 10 years and thereafter while the replacement cost is P IM for every 15 years and thereafter. The second option is to rent a building with the following pattern of annual rental cost shown in the table every 5 years and thereafter. If the interest is 24% cpd. weekly, what is the Capitalized Cost of the 2nd Option? Year 1 3 4 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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