The owners of a chain of fast-food restaurants spend $5500000 installing donut makers in all their restaurants. This is expected to increase cash flows by $2100000 per year for the next 4 years. The discount rate is 8%. What is the net present value of installing the donut makers?

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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.