DDR Enterprises is analyzing an expansion project.  The project's installed cost is $80,000.  It is eligible for 100% bonus depreciation.  The project has a $12,000 salvage value at the end of its five year expected life.  The project will requie an additional $8,000 investment in net working capital.  The tax rate is 25%.  What is the project's initial investment?

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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.