Garfield Inc is considering a new project that requires an initial investment of $37,700 and will generate a net income of $5,331 per year, if the project’s profitability index is 1.8, What is the present value of the project’s future cash flows. Round to the nearest dollar.

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A:

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A: FORMULA:

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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.