Annual Cost Probability, p Alternative A $4500 .10 7000 .60 8000 25 9250 .05 Alternative B $4000 20 5275 .60 6450 .15 8500 .05

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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.