Two alternatives are being considered for installation.  Which should be selected based on an  interest rate of 5.6% per year ?                                                         Alternative A         Alternative B First Cost, $                                            135,000                462,000 Annual Operating Cost, $/yr                   76,000                  34,600 Salvage value, $                                       71,200                        n/a Life, years                                                            9                          ∞

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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.