Session Inc. is expanding its manufacturing plant, which requires an investment of 4,000,000 is new equipment and plant modifications. The company’s sales are expected to increase by 3,000,000 per year as result of the expansion. Cash investments in current assets average 30% of sales; accounts payable and other current liabilities are 10% of sales. Trade in value of old machines is 600,000. Compute for the net investment cost for Session

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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.