A company is considering two alternative investment projects both of which have a positive net present value. The projects have been ranked on the basis of both net present value (NPV) and internal rate of return (IRR). The result of the ranking is shown below:                                         Project A           Project B                                NPV          1st                     2nd                             IRR           2nd                      1st Discuss any four (4) potential reasons why the conflict between the NPV and IRR ranking may have arisen.

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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.