A wood products company has decided to purchase new logging equipment for $100,000 with a trade-in of its old equipment. The old equipment has a BV of $10,000 at the time of the trade-in. The new equipment will be kept for10 years before being sold. Its estimated SV at the time is expected to be $5,000. Use this information to solve, The recovery period of the asset, using the GDS guidelines, is (a) 10 years (b) 7 years (c) 5 years (d) 3 years.

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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.