Hello Mitty Ltd is considering a project MEA as shown below. The estimated cash flows for this project is as follows: Project MEA £000 Investment (immediate cash outflow) 70 Net annual cash inflows: Year 1 40 Year 2 45 The business’s cost of finance is estimate at 12 per cent. Calculate: a) The net present value for project MEA. b) The approximate internal rate of return for project MEA.

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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.