Question 02 The expected cash flows of a project are as follows. Year Cash Flow -100000 1 20,000 2 30,000 3 40,000 50,000 30,000 4 The cost of capital is 12 per cent. Calculate the following and evaluate the project under each methods a. net present value b. Profitability Index c. Internal rate of Return d. Modified internal rate of Return and Payback period

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A: Given information:

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A: The Internal Rate of Return(IRR) can be calculated using the IRR function in Excel.

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A:

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.