In planning a small two-story ofce building, the architect has submitted two designs. The rst provides a foundation and structural details so that two additional stories can be added to the required initial two stories at a later date and without modications to the original structure. This building would cost $1,400,000. The second design, without such provisions, would cost only$1,250,000.If the rst plan is adopted, an additional two stories could be added at a later date at a cost of $850,000. If the second plan is adopted, however, considerable strengthening and reconstruction would be required, which would add $300,000 to the cost of a two-story addition. Assuming that the building is expected to be needed for 75years and MARRis10%per year.

How many years must pass in order for the two scenarios to be equal in costs?

Building 1 $ 1,400,000.00 $ 850,000.00 Building 2 $ 1,250,000.00 $ 850,000.00 $ 300,000.00 75 10% 75 10%