The purchase price of a certain new automobile (challenger) being considered for use in your business is $21,000. Your firm’s present automobile (defender) can be sold on the open market for $10,000. The defender was purchased with cash three years ago,and its current BV is $12,000. To make thedefender comparable in continued service to the challenger, your firm would need to make some repairs at an estimated cost of $1,500. Based on this information, A Solve, (a) What is the total capital investment in the defender, using the outsider viewpoint? (b) What is the unamortized value of the defender?

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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.