Question 3: Your Company is considering to choose one of the two projects: Project A and Project B. Each project will last 4 years and have no salvage value at the end. The company's required rate of return for all investment projects is 10%. The cash flows of Project A and Project B is provided below. Project A Project B Cost $250 000 $350 000 Future Cash Flows Year 1 55 750 97 050 130 250 165 700 159 000 102 090 215 000 305 000 Year2 Year 3 Year 4 Required: Identify which project your company should accept based on Profitability Index (PI)?

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A: To open the "FV function" window - MS-Excel --> Formulas --> Financials --> FV.

Q: None

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A:

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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.