construction. The contractor found two possible sources of gravel with the following data: Average distance gravel pit to dam site Gravel cost /cu.m at pit Purchase price of pit Road construction necessary Overbuden to be removed at P4.20 cu.m Hauling cost per cu.m per km Which of the two sites will give lesser cost? Source A 3.0 km P800,000.00 P350,000.00 P5.00 Source B 1.2 km P10.00 80,000 cu.m P5.00

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 3.4CE
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A certain masonry dam requires 200,000 cu m of gravel for its
construction. The contractor found two possible sources of gravel with
the following data:
Average distance gravel pit to dam site
Gravel cost /cu.m at pit
Purchase price of pit
Road construction necessary
Overbuden to be removed at P4.20 cu.m
Hauling cost per cu.m per km
Which of the two sites will give lesser cost?
Source A
3.0 km
P800,000.00
P350,000.00
P5.00
Source B
1.2 km
P10.00
80,000 cu.m
P5.00
Transcribed Image Text:A certain masonry dam requires 200,000 cu m of gravel for its construction. The contractor found two possible sources of gravel with the following data: Average distance gravel pit to dam site Gravel cost /cu.m at pit Purchase price of pit Road construction necessary Overbuden to be removed at P4.20 cu.m Hauling cost per cu.m per km Which of the two sites will give lesser cost? Source A 3.0 km P800,000.00 P350,000.00 P5.00 Source B 1.2 km P10.00 80,000 cu.m P5.00
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