Cost of equipment needed . Working capital needed Overhaul of the equipment in two years Salvage value of the equipment in four years Annual revenues and costs: Sales revenues ... Variable expenses Fixed out-of-pocket operating costs $130,000 $60,000 $8,000 $12,000 $250,000 $120,000 $70,000

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A:

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Q: Midwest Fabricators Inc. is considering an investment in equipment that will replace direct labor.…

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A: As per the given information:Initial investment - $165,000Annual costs - $43,000Income - $93,000

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.