Assume the following facts: A project will cost RM45 000 to develop. When the system becomes operational, after a one-year development period, operational costs will be RM9000 during each year of the system’s five year useful life. The system will produce benefits of RM30 000 in the first year of operation, and this figure will increase by 10% each year. When is the payback period for this project? Using the same facts, what is the ROI for this project? Using the same facts, what is the NPV for this project? (*Assuming 12% rate)

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A: Discount factor = initial investment / Annual cost savings = P235,000/P70,110  = 3.352

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Q: Assume the following facts:• A project will cost $45,000 to develop.• When the system becomes…

A: Computation:

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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.