The annual benefits associated with construction of an outer belt highway are estimated at $10.5 million by a local planning commission. The initial construction costs will be $400 million, and the project’s useful life is 50 years. Annual maintenance costs are $500,000 with periodic rebuilding costs of $10 million every 10 years. If interest is 2%, the benefit–cost ratio is closest to what value? (a) 0.25 (b) 0.75 (c) 1.11 (d) 1.35?

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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.