The net present value of the cost of operating a machine for the next five years is R8 947. The discount rate used by the company for investment appraisal is 9% Required What is the equivalent annual cost, and the present value of the cost in perpetuity of operating this machine? (Use discount factors to three decimal places)   a. Equivalent annual cost: R92 825.56; cost in perpetuity: R9 283   b. Equivalent annual cost: R2 300; cost in perpetuity: R25 555.56   c. Equivalent annual cost: R2 000; cost in perpetuity: R20 000.00   d. Equivalent annual cost: R9 283; cost in perpetuity: R92 825.56

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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.