An injection molding system has a first cost of $175,000 and an annual operating cost of $95,000 in years 1 and 2, increasing by $6,000 per year thereafter.The salvage value of the system is 25% of the first cost regardless of when the system is retired within its maximum useful life of 5 years. Using a MARR of11% per year, determine the ESL and the respective AW value of the system.

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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.