Three building proposals are being considered by the owner, which proposal is more economical if money is worth 18% compounded semi-annually. (using Future as focal/reference point) A building to be constructed now costing P1.5M, or A smaller building costing P1M now, and an additional room costing P0.5M to be constructed after 5 years, or A single story building costing P.8M now and 2nd floor costing P0.7M to be constructed after 5 years
Three building proposals are being considered by the owner, which proposal is more economical if money is worth 18% compounded semi-annually. (using Future as focal/reference point) A building to be constructed now costing P1.5M, or A smaller building costing P1M now, and an additional room costing P0.5M to be constructed after 5 years, or A single story building costing P.8M now and 2nd floor costing P0.7M to be constructed after 5 years
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Three building proposals are being considered by the owner, which proposal is more economical if money is worth 18% compounded semi-annually. (using Future as focal/reference point)
- A building to be constructed now costing P1.5M, or
- A smaller building costing P1M now, and an additional room costing P0.5M to be constructed after 5 years, or
- A single story building costing P.8M now and 2nd floor costing P0.7M to be constructed after 5 years
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