The independent projects shown below are under consideration for possible implementation by Renishaw, Inc. If the company’s MARR is 14% per year and it uses the IROR method of capital budgeting, the projects it should select under a budget limitation of $105,000 are: (a) A, B, and C (b) A, B, and D (c) B, C, and D (d) A, C, and D First Annual Rate of Project Cost, $ Income, $/Year Return, % A −20,000 4,000 20.0 B −10,000 1,900 19.0 C −15,000 2,600 17.3 D −70,000 10,000 14.3 E −50,000 6,000 12.0

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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.