ABC Company estimated that it can generate $42,000 per year in additional cash inflows for the next five years if it automates some of its production equipment at an investment cost of $150,000. ABC's discount rate is 10 percent. Present value factors: Present value of $1 for 5 years @ 10 percent = 0.6209. Present value of an annuity of $1 for 5 years @ 10 percent = 3.7908. Calculate the following: Present value of additional cash inflows = $ (Round your answer to two decimal places.) Net present value of investment = $ (Round your answer to two decimal places.) Investment decision =  (Yes/No)

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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.