Para Co. is reviewing the following data relating to an energy saving investment proposal: Cost P50,000 (nondepreciable) Residual value at the end of 5 years 10,000 Present value of an annuity of 1 at 12% for 5 years 3.60 Present value of 1 due in 5 years at 12% 0.57 27. What would be the annual savings needed to make the investment realize a 12% yield assuming that Para will not realize the residual value at the end of year 5? 30. What would be the annual savings needed to make the investment realize a 12% yield assuming that Para will not realize the residual value at the end of year 5 and that the marginal tax rate is at 30%? 35. What would be the annual savings needed to make the investment realize a 12% yield assuming that Para will realize the residual value at the end of year 5 (as a gain) and that the marginal tax rate is at 30%?

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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.