A company wants to verify the feasibility of purchasing equipment for $ 84,000 which will be used for 6 years providing an annual gain of $ 29,000. The resale value after use is $ 10,000. If the company works with a TMA of 20% per year and the straight-line depreciation used in 6 years, Check if this investment is interesting considering: IR rate 20%; Financing with 80% of third party resources and 20% of own resources. Financing with third party funds must be amortized over 4 years using the Price system with interest of 9% per year. Calculate NPV of cash flow after income tax

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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.