The demand for a product during the next ten years will be such that revenues will be $100,000 the first year and will increase by $10,000 each year thereafter. If inflation is assumed to be 6% per yuear and the company uses 10% in its economic studies, what is the present worth of the revenues expressed in present dollars?

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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.