In building their plant, the officers of the International Leather Company had the choice between alternatives: One alternative is to build in Metro Manila where the plant would cost P2,000,000. Labor would cost annually P120,000 and annual overhead would be 40,000. Taxes and insurance would total 5% of the first cost of the plant. The second alternative would be to build in Bulacan a plant costing P2,250,000. Labor would cost annually P100,000 and overhead would be P55,000. Taxes and insurance would be 3% of the first cost. The cost of raw materials would be the same in neither plant. If capital must be recovered within 10 years and money is worth at least 20%, which site should the officers of the company choose using the Present Worth Method and what is the difference of its present worth? a. 56,764.897 (in metro manila) b. 56,345 (in Bulacan) c. 92,782.297 (in metro manila) d. 76,564 (in Bulacan)

In building their plant, the officers of the International Leather Company had the choice between alternatives: One alternative is to build in Metro Manila where the plant would cost P2,000,000. Labor would cost annually P120,000 and annual overhead would be 40,000. Taxes and insurance would total 5% of the first cost of the plant. The second alternative would be to build in Bulacan a plant costing P2,250,000. Labor would cost annually P100,000 and overhead would be P55,000. Taxes and insurance would be 3% of the first cost. The cost of raw materials would be the same in neither plant. If capital must be recovered within 10 years and money is worth at least 20%, which site should the officers of the company choose using the Present Worth Method and what is the difference of its present worth? a. 56,764.897 (in metro manila) b. 56,345 (in Bulacan) c. 92,782.297 (in metro manila) d. 76,564 (in Bulacan)

Fundamentals Of Construction Estimating

4th Edition

ISBN:9781337399395

Author:Pratt, David J.

Publisher:Pratt, David J.

Chapter12: Pricing Masonry, Carpentry, And Finishes Work

Section: Chapter Questions

Problem 5RQ

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