Apple is considering two mutually exclusive projects. The required rate of return on this project is 10%. The two projects provide the following information:   Project A Project B Initial Outlay (RM500,000) (RM500,000) Inflow year 1 RM120,000 RM160,000 Inflow year 2 RM110,000 RM160,000 Inflow year 3 RM130,000 RM160,000 Inflow year 4 RM180,000 RM160,000   Calculate the payback period for each project. Calculate the net present value for each project. Calculate the profitability index for each project.

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A: Here, To Find: Profitability Index (PI) and ranking =?

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Q: A or B.

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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.