What is the NPV for the following project if its cost of capital is 12% and its initial after tax cost is P5,000,000 and it is expected to provide after-tax operating cash flows of P1,800,000 in year 1, P1,900,000 in year 2, P1,700,000 in year 3 and (P1,300,000) in year 4? zero P1,494,336 P(1,494,336) Greater than zero.

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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.