The institute of Electronics and Communications Engineers of the Philippines (IECEP) is planning to put up its own building. Two proposals being considered are below.

1. The construction of the building now to cost P 400,000
2. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P 200,000.
By how much is proposal B more economical than proposal A if interest rate is 20% and depreciation to be neglected ?

A. P 19,122.15
B. P 19,423.69
C. P 19,518.03
D. P 19,624.49

Correct Answer: P 19,624.49 ✔

Last Updated: January 22, 2019