Fort requires equipment costing $320,000.  It is a  9-year project, and is depreciated straight line over its life.  It will will generate sales of $189,000 annually with costs of $93,500. Both the sales and costs are accurate to +/-15 percent. What is the annual OCF for the worst-case scenario if the  tax rate is 40 percent?

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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.