A project requires an immediate cash outflow of £300 million in return for the following probable cash flows:   State of Economy Probability of State of Economy Year 1 £ in million Year 2 £ in million Recession 0.2 800 130 Growth 0.5 300 350 Boom 0.3 900 440 Assume that the state of economy will be the same in the second year as in the first.  The required rate of return is 7%.  There is no tax or inflation. Required: a- Calculate the expected NPV                                                 b- Calculate the standard deviation of NPV

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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.