Screen mount revenue $200k/year, tax rate 20%, i = 5% Option 1: Buy tooling, $800K, Life 10 yrs, $50K salvage Option 2: Loan, $800K, $40K/year interest payment, balloon at 10 yrs $800K Option 3: Lease, $100K for years 1 -10. Use Present worth (PW) analysis to determine which is the best option.

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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.