A cooperative has voted to purchase a box truck to move produce to their distribution center. The new truck will cost $29,000. The marginal tax rate is 21%, inflation is 3% and the required rate of return is 10% and the risk premium is 4%. The IRS is allowing straight-line depreciation over 15 years. The coop estimates that the truck can be sold for $7,400 after 8 years. What is the present value of after-tax terminal value after 8 years? $4,428 $4,896 $7,428 $7.495 None of the answers are correct.

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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.