A manufacturing company is considering a capacity expansion investment at the cost of $250,000. The expansion would enable the company to produce up to 100,000 more parts and the useful life of the additional capacity is seven years. Each part would generate $2 net profit and annual operating and maintenance costs are estimated at $25,000 per year. If the MARR of the firm is 10%, what is the minimum yearly production rate to make this investment justifiable?Assume a salvage value of 0.(a) Less than 37,000                       (b) Between 37,000 and 39,000(c) Between 39,000 and 42,000        (d) More than 42,000

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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.