You own a rental building in the city and are interested in replacing the heating system. You are faced with the following alternatives: a. A solar heating system, which will cost $12,000 to install and $500 a year to run and will last forever (assume that your building will, too). b. A gas heating system, which will cost $5,000 to install and $1,000 a year to run and will last twenty years. c. An oil heating system, which will cost $3,500 to install and $1,200 a year to run and will last fifteen years. If your opportunity cost is 10 percent, which of these three options is best for you?

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A:

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A:

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A:

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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.