Scenario 2: Bremily Firewood Company is expanding their operations. The company has an expansion budget of $1,000,000 to use for contracting with local land owners. The company can contract with one, multiple, or zero local land owners. Assum the company has a MARR of 10% per year. 2C. Use the following information to determine which land parcels Bremily should contract with. Assume there is only one of each land parcel available and each parcel has an expected life of 6 years. Land Parcel Initial Net Present Value Owner Cost Peterson $564,000 $473,000 Johnson $475,000 $351,000 Smith $268,000 $194,000 Jefferson $832,000 $609,000 What is the best land parcel, or combination of land parcels, for Bremily Company to contract with? Note: Enter you answer as the number of each parcel (0 or 1) the company should choose.

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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.