A company can buy one of five machines to increase its production. Considering that the useful life of the machines is 8 years and that the attractive minimum rate of return is equal to 12% per year, indicate the best alternative. Use the internal rate of return (IRR) method Machine Initial Investment ($ million) Annual Operating Cost 1 50 20.54 2 60 17.08 3 75 15.42 4 80 11.37 5 100 11.37

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.