A capacity planning problem for new product category has the following estimates and characteristics. The average selling price/unit over the life of the product is $120 and the average variable cost/unit over the life of the product is $70. Each unit of capacity incurs a one-time investment cost of $20 (to build the capacity). In addition, there is an annual maintenance cost of $100 per unit of capacity. The product category will be phased out after 10 years. Random demand in year t is denoted Dt for t = 1, , 10. For modeling purposes, you may assume that demand in excess of capacity in a year is unsatisfied (i.e., cant sell more than capacity in a year). Let x denote the annual capacity decision (e.g., can produce up to x units in a year). Select the least accurate statement regarding elements of a model for this setting.

A.Profit in year 5 = $100x + $50min{D₅, x}.

B.The revenue in year 7 is more than the variable cost in year 7.

C.The total variable cost in year 2 is $70min{D₅, x}.

D.Initial investment in capacity = $20x.

E.Total random sales over 10 years = min{D₁ + D₂ + + D₁₀, 10x}.