Hello, Cowboy recording studio is considering the investment of $142,700 in a new recording equipment.  It is estimated that the new equipment will generate additional cash flow of $21,000 per year for each year of its 7-year life and will have a salvage value of $13,500 at the end of its life.  Cowboy's financial managers estimate that the firm's cost of capital is 8%.  (Use the appropriate factor(s) from the tables provided (present value and annuity tables were given).  Round the PV factors to 4 decimal places). Question a.  Calculate the net present value of the investment.  Negative numbers need a minus sign, do not round intermediate calculations. Net present value: ??? Question b.  Calculate the present value ratio of the investment.  Round your answer to 2 decimal places. Present value ratio: ??? thanks...

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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.