1)	Evaluating Investment Proposal (50 pts)
		Wiser Company needs more space and machinery to increase production. The production manager
	have been trying to decide which of two plans to accept.
						Plan A	Plan B
		Investment				4,000,000	5,500,000
		Additional fixed cash operating cost per year				600,000	800,000
		Additional capacity in machine hours per year				200,000	280,000
		The company uses straight line method of depreciation. No salvage value is expected for either
	investment at the end of their ten-year useful lives.
		The production manager prefers plan B because the cost per machine hour and investment per machine
	hour are lower than those for Plan A. The president, A. F. Alvarez, is unsure about this and asks the sales
	manager whether the capacity would be fully utilized. The sales manager provides the follow data.
					Product
					X	Y	Z
		Potential increased sales, in units			30,000	40,000	30,000
		Contribution margin per unit			18	24	40
		Machine hours required per unit			2	4	5
		Wiser Company pays taxes at a 40% rate and has cost of capital of 12%.
	Required:
	a)	Prepare a good financial analysis of Plan A and Plan B
	b)	Using the present value factor, determine the Net Present Value of Plan A and Plan B
	c)	Which Plan will you recommend? Give a well organized justification.
	d)	Supporing the recommendation for expansion about expanding the capacity, illustrate
		how this expanded capacity should be used?