One year ago, Machine A was purchased for $15,000, to be used for 5 years. The machine has not performed as expected, and it costs $750 per month for repairs, adjustments, and downtime. Machine B, designed to perform the same functions, can be purchased for $25,000 with monthly costs of $75. The expected life of machine B is 5 years. Operating costs are substantially equal for the two machines, and salvage values for both are negligible. If 6% is used, the incremental annual net equivalent of Machine B is nearest to a. $2165 b. $2886 c. $4539 d. $5260

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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.