A certain project requires an immediate cash outflow of $4 million. At the end of each of the next four years, the investment will generate cash inflows of $1.5 million. That is at the end of each years, 1st, 2nd, 3rd and 4th year cash inflows is $1.5 million. Inflation rate is expected to be 5% per year during the next four year period. Assuming the cash flows are in nominal terms, what will be the project's NPV is you required 5% realrateof return?

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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.