A fixed capital investment of ₱10,000,000 is required for a proposed manufacturing plant and an estimated working capital of ₱2,000,000. Annual depreciation is estimated to be 10% of the fixed capital investment. Determine the rate of return on the total investment and the payout period if the annual profit is ₱2,500,000. Ans: 12.50%, 4.8 years

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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.