Reference no: EM132759567

Problem 1: The company plans to make land for the parking area for its employees' vehicles. There are two ways that are being considered for building a parking lot. The first method using the conventional method requires an initial fee of Rp. 10,000,000 and is only 5 years old. It is assumed that the expenditure to rebuild each multiple of 5 years is the same as the initial cost of Rp. 10,000,000. Expenditures for maintenance are estimated at IDR 2,000,000 per year. The second method uses a sophisticated method, which can be used for 15 years, the initial cost is unknown, and requires a painting fee of IDR 1,000,000 per year. What is the initial cost of the second alternative so that the two methods are in the BEP condition with the KPK Horizon if the MARR set is 18%?