How do you handle the cost increase for magic items with multiple effects?

Question

In the DMG for D&D 3.5 on page 285 there is a chart for estimating the cost of new magic items. Under the section "Special" there is an attribute titled "Multiple Different Abilities". This attribute reads "Multiple higher item cost by 2".

Does that mean that you add the highest effect cost to the price again, or add double the highest effect cost to the price?

The following two examples may explain it better than I:

Example 1:

Ability A:             1,000gp
Ability B:             3,000gp
Ability C:             5,000gp
Multiple Effect Cost:  5,000gp

Total:                14,000gp

In this example the cost of Ability C (the highest costing ability) is effectively multiplied by two by adding its cost again into the calculation.

Example 2:

Ability A:             1,000gp
Ability B:             3,000gp
Ability C:             5,000gp
Multiple Effect Cost: 10,000gp

Total:                19,000gp

In this example the cost of Ability C (the highest costing ability) is multiplied by two and added back into the cost.

The calculation comes out very differently depending on how you read that table line. I tried to reverse engineer a few items from the DMG, but failed to do so properly. Does anyone know how the rule should be read?

Answer 1

Example 1 contains the correct reading of this rule.

As pointed out by Ernir, the Magic Item Compendium contains updated rules and clarifications for the creation of magic items.

Page number 233 of the Magic Item Compendium covers this case and states that:

In most cases, if the item is one that occupies a body slot, the cost of adding any additional ability to that item is 1-1/2 times the value of the added power (or the value of the added power plus 1/2 the value of the existing item, if the added power normally costs more than the existing item). For example, if a character adds the power to confer feather fall to her ring of jumping, the cost of adding this ability is 3,300 gp, the same as for creating a ring of feather falling × 1-1/2. On the other hand, if she were adding the power of a ring of force shield to that ring of jumping, the cost of adding the ability would be 9,750 gp (8,500 gp for the ring of force shield plus half of 2,500 gp, the price of a ring of jumping).

It is also worth noting that the Magic Item Compendium updates the cost of Multiple Different Abilities to be 1.5x instead of 2x.