Capital budgeting 1. A project with an initial cost of $750,000 is expected to generate returns of $300,000 per year for each of the next five years. What is the project’s payback period? A. 2.00 years B. 2.50 years C. 4.00 years D. 5.00 years 2. A proposed project is expected to generate returns of $50,000 per year for each of the next four years. If the project will cost $145,685 and taxes are ignored, what is the internal rate of return? A. less than 10% B. more than 16% C. 11% D. 14%

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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.