a flood control  dam is being proposed for construction. The initial cost is estimated to be  P4,600,000, with annual maintenance and inspection costs of P24,000. Every  5 years, minor reconstruction work will be undertaken on the dam at a cost of P150,000. If the dam is built, flood damage is expected to be reduced from  P800,000 to P100,000 annually. Assuming the dam to be permanent and the  interest rate is 8%, should the dam be built?

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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.