TO REMEDY THE TRAFFIC SITUATION AT A BUSY INTERSECTION IN QUEZON CITY, TWO PLANS ARE BEING CONSIDERED: PLAN A IS TO BUILD A COMPLETE CLOVER-LEAF COSTING P 9,200,000.00 WHICH WOULD PROVIDE FOR ALL NEEDS DURING THE NEXT 30 YEARS. MAINTENANCE COSTS ARE ESTIMATED TO BE P 2,000.00 A MONTH FOR THE FIRST 15 YEARS AND P 3,500.00 A MONTH FOR THE SECOND 15 YEARS. PLAN B IS TO BUILD A PARTIAL CLOVER-LEAF AT A COST OF P 6,500,000.00 WHICH WOULD BE SUFFICIENT FOR THE NEXT 15 YEARS. AT THE END OF 15 YEARS, THE CLOVER-LEAF WILL BE COMPLETED AT AN ESTIMATED COST OF P 7,500,000.00. MAINTENANCE WOULD COST P 1,400.00 A MONTH DURING THE FIRST 15 YEARS AND P 3,500.00 A MONTH FOR THE SECOND 15 YEARS. IF MONEY IS WORTH 8%, WHICH OF THE TWO PLANS WOULD YOU RECOMMEND? USE PRESENT WORTH OF COST METHOD.
TO REMEDY THE TRAFFIC SITUATION AT A BUSY INTERSECTION IN QUEZON CITY, TWO PLANS ARE BEING
CONSIDERED:
PLAN A
IS TO BUILD A COMPLETE CLOVER-LEAF COSTING P 9,200,000.00 WHICH WOULD PROVIDE FOR ALL NEEDS
DURING THE NEXT 30 YEARS. MAINTENANCE COSTS ARE ESTIMATED TO BE P 2,000.00 A MONTH FOR THE FIRST
15 YEARS AND P 3,500.00 A MONTH FOR THE SECOND 15 YEARS.
PLAN B
IS TO BUILD A PARTIAL CLOVER-LEAF AT A COST OF P 6,500,000.00 WHICH WOULD BE SUFFICIENT FOR THE
NEXT 15 YEARS. AT THE END OF 15 YEARS, THE CLOVER-LEAF WILL BE COMPLETED AT AN ESTIMATED COST
OF P 7,500,000.00. MAINTENANCE WOULD COST P 1,400.00 A MONTH DURING THE FIRST 15 YEARS AND P 3,500.00
A MONTH FOR THE SECOND 15 YEARS.
IF MONEY IS WORTH 8%, WHICH OF THE TWO PLANS WOULD YOU RECOMMEND? USE PRESENT WORTH OF
COST METHOD.
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