This question is based on the following in formation: An investment is Machinery costing P 250,000 with a 4-year life and no salvage value is expected to produce the following net income after taxes of 30%: End of year 1 P 17,000 2 22,000 3 25,000 4 26,000 How much is the annual tax shield? How much is the annual tax shield? A. P 17,580 B. P 17,850 C. P 18,570 D. P 18,750 What is the ROI (using the cash income)? A. 6.3% B. 9% C. 31.3% D. 34%

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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.