The University of Mindanao is planning to create a new building for the Technology Transfer and Intellectual Property Management Office (TTIPMO) at the Matina Campus. Two proposals are being considered: The construction of the building now to cost Php 4,000,000.00 or the construction of a smaller building now to cost Php 3,000,000.00 and at the end of 5 years an extension to be added to cost Php 2,000,00.00. By how much is proposal B more economical than proposal A if interest rate is 20% and depreciation to be neglected

The University of Mindanao is planning to create a new building for the Technology Transfer and Intellectual Property Management Office (TTIPMO) at the Matina Campus. Two proposals are being considered: The construction of the building now to cost Php 4,000,000.00 or the construction of a smaller building now to cost Php 3,000,000.00 and at the end of 5 years an extension to be added to cost Php 2,000,00.00. By how much is proposal B more economical than proposal A if interest rate is 20% and depreciation to be neglected

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 4P

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