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?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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