Supposed you have aPhp25,000 monthly budgetallotted for the purchase of lotinvestment, which among theseoptions is best to take for thepurchase of Php1,000,000 lot?Which is the worst? Explain.OPTION 1: 3-year amortizationpayment of Php33,215 @ 12%OPTION 2: 5-year amortizationpayment of Php23,790 @ 15%OPTION 3: 7-year amortizationpayment of Php21,020 @ 18%OPTION 4: 10-year amortizationpayment of Php20.000 @ 21%OPTION 5: 15-year amortizationpayment of Php20,585 @ 24%

Best option would be that option which is having less cost of finance and worst will be having more…

Answered: purc nvestment, which am ptions is best…

Business

Finance

purc nvestment, which am ptions is best to tak purchase of Php1,00C Which is the worst? E

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 27P

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Supposed you have a
Php25,000 monthly budget
allotted for the purchase of lot
investment, which among these
options is best to take for the
purchase of Php1,000,000 lot?
Which is the worst? Explain.
OPTION 1: 3-year amortization
payment of Php33,215 @ 12%
OPTION 2: 5-year amortization
payment of Php23,790 @ 15%
OPTION 3: 7-year amortization
payment of Php21,020 @ 18%
OPTION 4: 10-year amortization
payment of Php20.000 @ 21%
OPTION 5: 15-year amortization
payment of Php20,585 @ 24%

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