If a manufacturer of electronic devices invests $750,000 in equipment for making compact piezoelectric accelerometers for general purpose vibration measurement, estimate the rate of return from revenue of $ 250,000 per year for 10 years and $84,000 in salvage value from the used equipment sale in year 10. The rate of return is 34.5 %.

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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.