Calculate the capitalized cost of a project that has an initial cost of P3,000,000 and an additional investment cost of P1,000,000 at the end of every ten years. The annual operating cost will be P100,000 at the end of every year for the first four years and P160,000 thereafter. In addition, there is expected to be a recurring major rework cost of P300,000 every 13 years. Assume i = 15%. Ans: P4,281,990 The will of a wealthy philanthropist left P5,000,000 to establish a perpetual charitable foundation. The foundation trustees decided to spend P1,200,000 to provide facilities immediately and to provide P100,000 of capital replacement at the end of each 5- year period. If the invested funds earned 12% per annum, what would be the year- end amount available in perpetuity from the endowment for charitable purpose? Ans: P440,259 A contract has been signed to lease a building at P200,000 per year with an annual increase of P1,500 for 8 years. Payments are to be made at the end of each year, starting one year from now. The prevailing interest rate is 7%. What lump sum paid today would be equivalent to the 8-year lease-payment plan? Ans: P147,609