Page:Indian Journal of Economics Volume 2.djvu/37

 A.RT OF EOONOMIC, DEI?ELOPMENT It will be seen tlmt the cost including accumulated interest ,p to t;  o/ completio; in each cam is slightly greater by the laser method. To be correct, however, it i8 nece to allow for the net profib eazned during the method 8aves; thirty month8 of time which the and in calc thee net cost I have assumed that 6 per cent interest continues to be paid on the tot81 cost R8.11,,, giving Rs. 69,800 per annum as interest charge. Then we have:-- Rs. ( B0.,3( ) x ( B0--12 )=Its. 26,? as the saving which, deducted from Re. 11,,, give8 the net co It is obvious that in 8pite of the  method coeting 10 per cent more than the 8low method, there is, with the other condition8 azsumed, a saving of Rs. 8,750 by adoptin8 iL In giving ftn example of the second c]ft88 of case8 I 8hall 8how that a cspit cost increased by even 66 per cent or more may be in reality the cheapest if the rapid completion thereby secured enables other costly works already completed, or capable of earner comple- tion without additional expens to come into operation; and this in spite of the fact thst I shah take the rate of interest only at 4 per cent and, assume it to sccumu- late only by half-yearly rest. I shall also tske the net ear8 to be, when in full operation, but 6 per cent on Rs. 1,09,00,000, which i8 the total cost by the slow method of completion. Let the cspitl outlay on the work8 other than the tunnel in question be one crore (17m. l,00,00,000). The interest charge on this is 4 lakh8 yearly. Let the estima cost of the tunnel completed in 86 month8 be l?m. 9,00,000, and ils coet