The Phil. Society of Mechanical Engineers is planning to put up its own building. Two proposals being considered are:
A. The construction of the building now, to cost P400,000.00
B. The construction of a smaller building now, to cost P300,000.00 and at the end of 5 years, an extension to be added to cost P200,000.00.
Which proposal is more economical, if interest rate is 20%, depreciation to be neglected and by how much?