ACME is considering a purchase of a new production line with 5 years of expected life. The management is going to consider 4 proposals and set its MARR to 12%. Use incremental analysis to evaluate the alternatives from the data displayed in a table below. Which alternative should be selected using the IRR and PW methods with incremental analysis? (Hint: Make sure you arrange the alternatives in the correct order before the analysis).   Proposal 1 Proposal 2 Proposal 3 Proposal 4 Capital investment $22,000 $27,500 $24,000 $28,500 Net annual income $5,000 $7,700 $6,000 $8,150 Market value $8,000 $9,500 $9,000 $10,000

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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.