St.

Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

V. ECONOMIC ANALYSIS

ECONOMIC ANALYSIS (Computation Sheet)

CASE 1

Rate / Month
Years Rented Rooms
Commercial Space
(max. of 7 persons)
1 to 5 ₱20,000.00 ₱20,000.00
6 to 10 ₱22,000.00 ₱25,500.00
No. of Units 1 12

(+NPV) (-NPV) Interval

Interest (i): 18% 25% 7%
Life span (n): 10

Ko: Php. 9,000,000

Salvage Value (SV) = 10% of Ko Tax (T) = 12% of Benefit

Maintenance (M) = 2% of Benefit Admin Cost (A) = 5% of Benefit

Benefit = (% occupancy) (rate of rent) (no. of units) (12)

Cost = Depreciation + Maintenance + Tax + Admin. Cost

Depreciation = (K o – SV )¿

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

 St. Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

Year 1 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱20,000.00) (1) + (₱20,000.00) (12)]×12 = ₱3,120,000.00

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

Maintenance, Tax & Admin Cost = (19%) (₱3,120,000) = ₱592,800.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

Total Cost = ₱300,000 + ₱592,000.00 = ₱892,000.00

Benefit – Cost = ₱3,120,000.00 – ₱892,000.00 = ₱2,228,000.00

Cumulative = ∑ (B – C) = ₱2,228,000.00

Year 2 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱20,000.00) (1) + (₱20,000.00) (12)]×12 = ₱3,120,000.00

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

 St. Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

Maintenance, Tax & Admin Cost = (19%) (₱3,120,000) = ₱592,800.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

Total Cost = ₱300,000 + ₱592,000.00 = ₱892,000.00

Benefit – Cost = ₱3,120,000.00 – ₱892,000.00 = ₱2,228,000.00

Cumulative = ∑ (B – C)= ₱2,228,000.00 x 2 = ₱4,456,000.00

Year 3 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱20,000.00) (1) + (₱20,000.00) (12)]×12 = ₱3,120,000.00

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

Maintenance, Tax & Admin Cost = (19%) (₱3,120,000) = ₱592,800.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

Total Cost = ₱300,000 + ₱592,000.00 = ₱892,000.00

Benefit – Cost = ₱3,120,000.00 – ₱892,000.00 = ₱2,228,000.00

 St. Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

Cumulative = ∑ (B – C) = ₱2,228,000.00 x 3 = ₱6,684,000.00

Year 4 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱20,000.00) (1) + (₱20,000.00) (12)]×12 = ₱3,120,000.00

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

Maintenance, Tax & Admin Cost = (19%) (₱3,120,000) = ₱592,800.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

Total Cost = ₱300,000 + ₱592,000.00 = ₱892,000.00

Benefit – Cost = ₱3,120,000.00 – ₱892,000.00 = ₱2,228,000.00

Cumulative = ∑ (B – C) = ₱2,228,000.00 x 4 = ₱8,219,000.00

Year 5 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱20,000.00) (1) + (₱20,000.00) (12)]×12 = ₱3,120,000.00
 St. Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

Maintenance, Tax & Admin Cost = (19%) (₱3,120,000) = ₱592,800.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

Total Cost = ₱300,000 + ₱592,000.00 = ₱892,000.00

Benefit – Cost = ₱3,120,000.00 – ₱892,000.00 = ₱2,228,000.00

Cumulative = ∑ (B – C) = ₱2,228,000.00 x 5 = ₱11,140,000.00

Year 6 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱22,000.00) (1) + (₱25,500.00) (12)]×12 = ₱3,936,000.00

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

Maintenance, Tax & Admin Cost = (19%) (₱3,936,000) = ₱747,840.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

 St. Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

Total Cost = ₱300,000 + ₱747,840 = ₱1,047,840.00

Benefit – Cost = ₱3,936,000– ₱1,047,840.00 = ₱2,888,160.00

Cumulative = ∑ (B – C) = ₱11,140,000.00 +₱2,888,160 = ₱14,028,169.00

Year 7 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱22,000.00) (1) + (₱25,500.00) (12)]×12 = ₱3,936,000.00

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

Maintenance, Tax & Admin Cost = (19%) (₱3,936,000) = ₱747,840.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

Total Cost = ₱300,000 + ₱747,840 = ₱1,047,840.00

Benefit – Cost = ₱3,936,000– ₱1,047,840.00 = ₱2,888,160.00

Cumulative = ∑ (B – C) = ₱14,028,169.00+₱2,888,160 = ₱16,916,329.00

 St. Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

Year 8 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱22,000.00) (1) + (₱25,500.00) (12)]×12 = ₱3,936,000.00

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

Maintenance, Tax & Admin Cost = (19%) (₱3,936,000) = ₱747,840.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

Total Cost = ₱300,000 + ₱747,840 = ₱1,047,840.00

Benefit – Cost = ₱3,936,000– ₱1,047,840.00 = ₱2,888,160.00

Cumulative = ∑ (B – C) = ₱16,916,329+₱2,888,160 = ₱19,804,489.00

Year 9 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱22,000.00) (1) + (₱25,500.00) (12)]×12 = ₱3,936,000.00

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

 St. Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

Maintenance, Tax & Admin Cost = (19%) (₱3,936,000) = ₱747,840.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

Total Cost = ₱300,000 + ₱747,840 = ₱1,047,840.00

Benefit – Cost = ₱3,936,000– ₱1,047,840.00 = ₱2,888,160.00

Cumulative = ∑ (B – C) = ₱19,804,489+₱2,888,160 = ₱22,692,649.00

Year 10 (Case 1)

(%) of Occupancy = 100%

Benefit = (% occupancy) (rate of rent) (no. of units) (12)
Benefit = 100% [(₱22,000.00) (1) + (₱25,500.00) (12)]×12 = ₱3,936,000.00

Depreciation = (K o – SV )¿
Depreciation = ¿
Depreciation = ₱300,000

Maintenance, Tax & Admin Cost = (2%*Benefit) + (12%*Benefit) + (5%*Benefit)

Maintenance, Tax & Admin Cost = (19%) (₱3,936,000) = ₱747,840.00

Total Cost = Depreciation + Maintenance, Tax & Admin Cost

Total Cost = ₱300,000 + ₱747,840 = ₱1,047,840.00

Benefit – Cost = ₱3,936,000– ₱1,047,840.00 = ₱2,888,160.00

Cumulative = ∑ (B – C) = ₱22,692,649+₱2,888,160.00 = ₱25,580,809.00

 St. Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

(+NPV) 18%

B 1−C1
NPV =−K o +
¿¿

₱ 2,228,000.00
NPV =−₱ 9,000,000+
¿¿

NPV =₱ 5,006.412 .135 ∴ (FEASIBLE)

B1
B= ¿ ¿

₱ 3,120,000.00
B=
¿¿

B=₱ 28,997,395.87

C1
C=K o +
¿¿
 St. Anthony’s College
ENGINEERING AND TECHNOLOGY DEPARTMENT
San Angel, San Jose, Antique

₱ 892,000.00
C=₱ 9,000,000+
¿¿

C=₱ 23,702,155.73

B ₱ 28,997,395.87
= =1.22
C ₱ 23,702,155.73

(-NPV) 25%

B 1−C1
NPV =−K o + ¿¿

₱ 2,228,000.00
NPV =−₱ 9,000,000+
¿¿

NPV =₱ 449,009,109.13

IRR=% Rate of ¿
₱ 5,006,412.14
IRR=18 %+ ×7 %
₱ 5,006,412.14+(|₱ 449,009,109.13|)

IRR=18.082%

∴ 18.082% >18 , FEASIBLE