Soft and Cuddly is considering a new toy that will produce the following cash flows. Should the company produce this toy if the firm requires a 15 percent rate of return?                Cashflow Year 0      $-31,000 Year 1      $26,000 Year 2      $9,000 a) Yes, because the project's net present value is $1,586 b) Yes, because the project's net present value is $565 c) No, because the project's net present value is -$1,586 d) No, because the project's net present value is -$565

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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.