The Ohm Depot Co. is currently considering the purchase of a newmachine that would increase the speed of manufacturing electronic equipmentand save money. The net cost of the new machine is $66,000. Theannual cash flows have the following projections:Year Amount ($)0       (66,000)1       21,0002       29,0003       36,0004       16,0005       8,000If the cost of capital is 10 percent, find the following:a. The PVBb. The NPVc. The IRRd. Paybacke. PI

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A: Formulas:

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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.