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Solve and show solutions completely. Draw the cash flow diagrams. Two project studies for the construction of an engineering building are under consideration. On one
Solve and show solutions completely. Draw the cash flow diagrams. Two project studies for the construction of an engineering building are under consideration. On one study the cost of the building is P650,000 with a life of 20 years and a salvage value of P40,000. Yearly maintenance and repair is P1,800. The other proposes a first cost of P720,000, life of 30 years, and a salvage value of P60,000. Yearly maintenance and repair is P2,000. If the yield on the investment is 6%, determine which project study is acceptable by annual cost method.
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