Question: A company decided to develop low - cost photo - voltaic solar - energy cells. It decided on two development choices: a fully automatic line

A company decided to develop low-cost photo-voltaic solar-energy cells. It decided on two
development choices: a fully automatic line for $800,000 capable of producing 200,000 cells/year for
a profit of $1/cell, or a semi-automatic line for $500,000 capable of producing 120,000 cells/year for a
profit $1/cell. It is estimated that both lines will last for five years and will have a book value at the
end of the five years of 10 percent. Assume both lines will be working to 100 percent capacity. You
are the PM for development. Please make all calculations with or without taxes.
Show the ROI calculations for both machines, based on five-year life, 10 percent book value, and
33 percent taxes when applicable.

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