uipment that will increase revenue by P94,500 a year requires an investment of P430,000. It is estimated to have a net salvage value of P50,000 at the end of 12 years, with annual expenses for repairs and maintenance totaling P15,000. Determine if the investment is justified using future worth analysis and an

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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.