A project will cost $45,000 to develop. When the system becomes operational after a one-year development period, operational costs will be $9,000 during each year of the system’s five-year useful life. The system will produce benefits of $30,000 in the first year of operation, and this figure will increase by a compound 10% each year.   What is the payback period for this project? What is the return on investment (ROI) for this project? What is the net present value (NPV) for this project?

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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.