Q1: Taking an interest rate 15%, A cogeneration energy system need to be procured for an industrial facility. Depending on traditional B/C analysis which alternative should be adopted use incremental B/C Analysis to choose the best one? Initial cost, $ Annual M&O cost, $/year Refurbishment Cost $ Annual benefits, $/year Annual disbenefits, $/year Salvage value $ Life year (n) Proposal A 1,100,000 110,000 60,000 (each 3 years) 540,000 285,000 Proposal B 1,600,000 80,000 90,000 (each 4 years) 660,000 345,000 20 % of P 30 % of P 12

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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.