You are the engineer who is responsible about renovation of your company headquarters. Two plans

were proposed. Plan X involves remodeling the existing headquarters at a cost of $ 2.25 million. The expected

useful life of the existing headquarters after remodeling is 25 years and the annual maintenance and operating

(M&O) cost would be $126,000 per year. Plan Y involves building a new headquarters and selling the existing one

with a net price of $750,000 three years from now. A total of 5 thousands square meter is required for the new

headquarters. The cost of the land is estimated to be $366,000 per thousand square meters. The size of the building

is 1 thousand square meter and the building will be 10 stories. The construction cost of the building is $150 per

square meter and requires 5 years assuming 2 stories are built per year. In addition, the architect and contractor

fees are expected to be $420,000. The expected useful life of the new headquarters is 50 years and the annual

maintenance and operating (M&O) cost would be $116,000 per year. If the interest rate is i % per year, evaluate

which plan is better on the basis of:

(a) the present worth analysis, and

(b) the modified B/C analysis

Provide the solution of the question shown below using i value as 11%.

. Pe PW Y PA Y Ps Y PW (C+0) AB/C