А В C Unlevered Firm Levered Firm 10,000 3,200 6,800 2,312 4,488 3,200 1 2 EBIT 10,000 3 Interest 4 Taxable Income 10,000 3,400 6,600 5 Tax (tax rate: 34%) 6 Net Income 7 CFFA 0

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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.