Engineering Board Exam Reviewer · Perpetuity and Capitalized Cost · medium
Find the capitalized cost of a structure that requires an initial cost of P500,000 and annual maintenance of P20,000 forever, at 8% annual interest.
- P750,000
- P700,000
- P800,000
- P650,000
Answer
A. P750,000
Solution
CC=500000+20000/0.08=500000+250000=P750,000.
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