The Institute of Integrated Electrical Engineers of the Philippines, Inc. (IIEE) Southern Quezon Chapter is planning to put up its own office building. Two proposals being considered: A. The construction of the new office building now to cost P4,000,000.00 B. The construction of a smaller office building now to cost P3,000,000.00 and at the end of 5 years, an extension to be added to P2,000,000.00. What is the difference in amount between the two proposals, if interest rate is 20%, depreciation to be neglected and by how much?

The Institute of Integrated Electrical Engineers of the Philippines, Inc. (IIEE) Southern Quezon Chapter is planning to put up its own office building. Two proposals being considered: A. The construction of the new office building now to cost P4,000,000.00 B. The construction of a smaller office building now to cost P3,000,000.00 and at the end of 5 years, an extension to be added to P2,000,000.00. What is the difference in amount between the two proposals, if interest rate is 20%, depreciation to be neglected and by how much?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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