Patz Corporation is considering the purchase of a computer-aided manufacturing system. The cash benefits will be $720,000 per year. The system costs $5, 415,000 and will last eleven years. Compute the NPV assuming a discount rate of 6 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.