Optimum Properties Corp. is considering the construction of a 50-unit condominium near the University Belt area. The 15-year investment study shows the following data: Disbursements   Revenue   Land P8 000 000.00 Land, after 15 yers P43 000 000.00 Building 25 000 000.00 Bldg, after 15 yers 8 600 000.00 Maintenance/yr 300 000.00 Rent/unit-yr 120 000.00 Insurance & Realty Tax/yr 1.2%     With an estimated occupancy rate of 92% at all times, validate the acceptability of the project using the IRR method. The company applies a 15% MARR on its investments.

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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.