A new project will cost $40,000 to fund today, and an additional $40,000 next year.  The device built will generate revenues of $17,000 starting in year 2 which increases by 4% each year until the device is sold at the end of year 12.  The device’s salvage value is $10,000.  $2,000 of maintenance is required every year.  What is the NPV of building this device, if the interest to borrow the funds is 15%?  (Round to nearest dollar)

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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.