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Business Revision Accounting and finance

Budgeting ­ is the process of setting targets. It can be seen as a way of turning a firm's
strategy into reality.
Reasons for setting budgets are:
o To ensure no one overspends what the company expected
o Provide a measure of manager success

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To calculate how many units are required to make a certain profit, use the equation:
Fixed costs plus Profit divided by contribution.

Investment appraisal

Payback period ­ Amount of time it takes for a project to recover or payback initial outlay.

Equation for payback period is (Amount invested divided by…


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