Company is planning to purchase an new machine for the amount of P90,000, with an estimated useful life of 5 years and a salvage value of P10,000. The machine will be depreciated using the straight line method. The machine is expected to produce cash flows from operations, net of income taxes of P36,000 a year in the next 5 years. The machine's salvage value is P20,000 in years 1 and 2 and P15,000 in years 3 and 4.  What will be the bailout period for the new machine? A. 1.4 years B. 2.2 years C. 1.9 years D. 3.4 years

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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.