A laboratory director has two options on how he will be creating a special tonic.

The laboratory directors 1st option is to create her own lab. This means she will purchase a chemical reactor that costs $650,000. The laboratory director must also hire an assistant and her assistant will be paid a salary of $90,000 a year, her salary has to be adjusted for inflation every year and the inflation rate is 2.5%. After ten years, the laboratory director can sell the chemical reactor for $50,000. With this laboratory structure the laboratory director can create 1,500 milligrams of the special tonic per year.

The laboratory directors 2nd option is to outsource the entire creation process of the tonic to a company that creates the special tonic, with this option the price of the tonic will initially be $25 per milligram, but over the next ten years the price will increase due to inflation, and the inflation rate is 2.5%.

This project will be financed by the laboratory director with her equity, her equity is in a fund that has an 11% annual return. Taxes and depreciation will not be considered at all because this isn't a commercial project, so please do not include taxes and depreciation in your calculation. With the data given please find the unit price of creating the special tonic in the laboratory, and decide which option is the best option economically for the laboratory director. Please include calculations for both options to justify your answer.