You are considering an investment for which you require a 14% return. The investment costs $61,900 and will produce cash inflows of $26,000 for three years. Should you accept this project? Why or why not? a) Yes, because although the IRR is 12.51%, the NPV is positive b) Yes, because although the IRR is 13.67%, the NPV is positive c) No, because the IRR is 13.67% and the NPV is negative d) No, because the IRR is 12.51% and the NPV is negative

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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.