A company is considering a machine with one that will save P 50,000 per year for five years in cash operating costs and has P 20,000 more depreciation expense per year than the existing machine. The tax rate is 40%.  Cost of capital is 14%. Currently, the NPV is zero. The maximum amount that should be paid for the machine is:

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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.