Bahwan Company is considering a new product line to supplement its range line. It is anticipated that the new product line will involve cash investments of $40,000 at time 0 and $50,000 in year 1. After-tax cash flows of $35,000 are expected in year 2, $45,000 in year 3, $35,000 in year 4. If the required rate of return is 16%, a) what is the net present value of the project? Is it acceptable? b) What is the project's payback period? Select one: a. None of the other three answers b. NPV= 8932, Acceptable, Pay back = 2 years c. NPV=-8932, Not acceptable, Pay back = 27.4 months d. NPV=-8932, Not Acceptable, Pay back = 2 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.