You are considering purchasing a CNCmachine which costs $150,000. This machine willhave an estimated service life of 10 years with a netafter-tax salvage value of $15,000. Its annual aftertax operating and maintenance costs are estimatedto be $50,000. To expect an 18% rate of return oninvestment, what would be the required minimumannual after-tax revenues?

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Q: Raghubhai

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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.