A widget machine will cost $480,000.  The anticipated increase in revenue will be $140,000/year for 5-years.  Annual expenses will be $30,000/year for 5-years.  The depreciable life is estimated to be 5-years and the salvage value will equal $35,000.  Additional inventory necessary to run the machine will be $26,000.  Initial training expenses are $20,000.  Tax rate equals 40%.  Find the IRR.

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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.