The data required for a new investment are calculated as follows: Cost of the investment: 10.000.000 $ Cost of capital (discount rate): 25% Economic life of the investment: 5 years Tax rate: 40% Normal depreciation method is applied. What will be the net present value of the investment if the depreciation and pre-tax profit  that the company expects from the investment every year for 5 years is 7,000,000 $?

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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.