The institute of Electronics and Communications Engineers of the Philippines (IECEP) is planning to put up its own building. Two proposals being considered are:A. The construction of the building now to cost P 400,000B. 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 19,624.49
• C. P 19,518.03
• D. P 19,423.69

Answer: (B)