Two contractors submitted the following cost estimates for a proposed bridge:
Bridge A Bridge B
First Cost P20M P27M
Life 20 years 30 years
Salvage Value P500,000 P750,000
Annual Upkeep P160,000 P50,000
Repairs P1.5M every 4 years P1M every 6 years
If interest is 7.5% compounded annually, which bridge is cheaper in terms of its capitalized cost? and by how much?
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