The TinX Corp. is investing in a machine which will increase the quality of their product. The initial investment in the machine is $800,000. The life of the machine is 4 years. The machine will be depreciated using the straight-line method. The annual sales will be $400,000, the annual fixed cost will be $50,000, and the annual variable cost will be 10% of the sales. If the required rate of return is 12% and corporate tax rate is 30%, what is the net present value of the project. Calculate the net present value of the project.

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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.