Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining's cost of capital is 10.14 percent. What is the PI of a project if the initial costs are $1,759,048 and the project life is estimated as 7 years? The project will produce the same after-tax cash inflows of $391,410 per year at the end of the year

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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.