The institute of Electronics and Communications Engineers of the Philippines (IECEP) is planning to put up its own building. Two proposals being considered are below.

Engineering Economy 19/05/2020

1. The construction of the building now to cost P 400,000
2. The construction of a smaller building now to cost P300,000 and at the end of 5 years, an extension to be added to cost P 200,000.
By how much is proposal B more economical than proposal A if interest rate is 20% and depreciation to be neglected ?

A. P 19,122.15
B. P 19,423.69
C. P 19,518.03
D. P 19,624.49

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