A Philippine Society of Civil Engineers is planning to put up its own building, and two proposals (5-year project) are being considered. The money is worth 20% compounded monthly.

PROPOSAL A.

The construction of the building to cost P246,933.00 at the end of 4 years and P162,751.00 for the next year.

PROPOSAL B.

The construction of the building now, to cost P55,016.00, P184,773.00 at the end of 4 years and an extension to be added a year after, to cost P92,348.00.

Determine the following:

a. Equivalent present cost of Proposal A.

b. Equivalent present cost of Proposal B.

c. Which among the proposals is economical and by how much neglecting the effect of depreciation and inflation?