Two mutually exclusive investment projects have the following forecasted cash flows: a. Compute the internal rate of return for each project. b. Compute the net presnt value for each project if the firm has a 10 percent cost of capital. c. Which project should be adopted? Why? Year A B 0 -$20000 -$20000 1 +10000 0 2 +10000 0 3 +10000 0 4 +10000 +60000

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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.