One of two mutually exclusive alternatives must be selected. Alternative A costs $30,000 now for an annual benefit of $8450. Alternative B costs $50,000 now for an annual benefit of $14,000. Using a 15% nominal interest rate, compounded continuously, which do you recommend? Solve by annual cash flow analysis with 5 year lives.

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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.