JKL Company is considering replacing a machine with a book value of P100,000, a remaining useful life of 4 years, and annual straight-line depreciation of P25,000. The existing machine has a current value of P80,000. The replacement machine would cost P160,000, have a4-year useful life, save P50,000 per year in cash operating costs. If there placement machine would be depreciated using straight-line method and the tax rate is 40%, what would be the increases in annual income taxes if the company replaces the machine? P21,000 P14,000 P32,000 P20,000

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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.