Three building proposals are being considered by the owner, which proposal is more economical if money is worth 18% compounded semi-annually. (use Present as focal/reference point) A building to be constructed now costing P1.5M, orA smaller building costing P1M now, and an additional room costing P0.5M to be constructed after 5 years, orA single story building costing P.8M now and 2nd floor costing P0.7M to be constructed after 3 years

The present value analysis is an important concept that helps businesses. The present value gives…

Answered: Three building proposals are being…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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. (use Present 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 2^nd floor costing P0.7M to be constructed after 3 years

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