Summer council is a thriving and diverse town, an important commercial and cultural centre and home to over 100,00 people living in more than 35,000 households. The population has grown by 12% over the last 11 years and its expected to continue to grow.Summerlea council provides a wide variety of services including public health traffic parking schools parks and animal management.2022/2023 was a challenging year for Summerlea council. National reductions in government grant funding coupled with in year service demands led to a 2.2m budget deficit. Panel have been established to decide on the type of budget council should use that can provide more accurate and up to date financial information to assist decision-making. Can you help to choose between Incremental budgets Budget ZBBROLLING BUDGET Activity based budgeting (ABB) And prepare sale budget , production budget and labour budget

Solution To evaluate the feasibility of investing in recycling machinery, the Summeriea Council can use various financial metrics such as Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period. Let's calculate these metrics for each machine. Explanation: First, we need to calculate the annual cash flows for each machine. The annual cash flow is the difference between the revenue generated and the total costs, including fixed and variable costs. Additionally, we need to consider the salvage value at the end of the machine's life. Let's denote: I as the initial investment, n as the life of the machine in years, r as the discount rate (a rate of return), RV as the residual value (salvage value), FC as the fixed cost per annum, VC as the variable cost per unit, SP as the selling price per unit, V as the sales volume per year. The annual cash flow (CF) for each year is calculated as follows: CF=V (SP-VC))-FC The salvage value (SV) at the end of the project is calculated as: SV=1.0.2 Now, let's calculate the NPV, IRR, and Payback Period for each machine. 1. Machine A. o Initial Investment (1: 2440,000 o Life (n): 4 years The annual cash flow (CF) for each year is calculated using the formula above. The salvage value (SV) isl.0.2. 2. Machine B. o Initial Investment (2: 2525,600 o Life (n): 5 years Calculate the annual cash flow (CF) for each year, and the salvage value (SV). 3. Machine C: o Initial Investment (1: $884,600 . Life (n): 3 years Calculate the annual cash flow (CF) for each year, and the salvage value (SV). Explanation: After calculating the annual cash flows, salvage values, and considering the discount rate, we can use these values to calculate the NPV, IRR, and Payback Period for each machine. The machine with the highest NPV and IRR and the shortest Payback Period would be the most favorable option for the Summeriea Council