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A certain manufacturing plant is being sold and was submitted for bidding. Two bids were submitted by the interested buyers. The first bid offered to pay PhP 200,000 each year for 5 years, each payment being made at the beginning of each year. The second bidder offered to pay PhP 120,000 the first year, PhP 180,000 the second year, and PhP 270,000 each year for the next 3 years, all payments being made at the beginning of each year. If money is worth 12% compounded annually, which bid should the owner of the plant accept?

A certain manufacturing plant is being sold and was submitted for bidding. Two bids were submitted by the interested buyers. The first bid offered to pay PhP 200,000 each year for 5 years, each payment being made at the beginning of each year. The second bidder offered to pay PhP 120,000 the first year, PhP 180,000 the second year, and PhP 270,000 each year for the next 3 years, all payments being made at the beginning of each year. If money is worth 12% compounded annually, which bid should the owner of the plant accept?

Structural Analysis
Structural Analysis
6th Edition
ISBN:9781337630931
Author:KASSIMALI, Aslam.
Publisher:KASSIMALI, Aslam.
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
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A certain manufacturing plant is being sold and was submitted for bidding. Two bids were submitted by the interested buyers. The first bid offered to pay PhP 200,000 each year for 5 years, each payment being made at the beginning of each year. The second bidder offered to pay PhP 120,000 the first year, PhP 180,000 the second year, and PhP 270,000 each year for the next 3 years, all payments being made at the beginning of each year. If money is worth 12% compounded annually, which bid should the owner of the plant accept?
Transcribed Image Text:A certain manufacturing plant is being sold and was submitted for bidding. Two bids were submitted by the interested buyers. The first bid offered to pay PhP 200,000 each year for 5 years, each payment being made at the beginning of each year. The second bidder offered to pay PhP 120,000 the first year, PhP 180,000 the second year, and PhP 270,000 each year for the next 3 years, all payments being made at the beginning of each year. If money is worth 12% compounded annually, which bid should the owner of the plant accept?
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