[3] (20pts) Your AGG-only mask production team is considering outsourcing production of its designer, multi-use, disposable masks rather than engage in local production. A vendor has offered to produce the same masks at a unit price of $1.55/mask as long as the order is for at least 500,000 masks. The lead ISEN for AGG-only has estimated the expected demand to be 750,000 masks each year over the next 5 years. If AGG-only decides to manufacture the masks themselves they will investment in a multi- purpose production cell that will cost $250,000 and will have a salvage value of $50,000 after 5 years. Unit production cost is estimated in the table below. The AGG-only firm CFO has identified a MARR of 12% for assessing economic investment decisions. Direct material $0.25 Direct labor $0.10 Variable factory overhead $0.25 Fixed factory overhead $0.80 Total unit cost $1.40 Find the following: (a) Draw the cash flow diagram for the make option (b) Calculate AEC(12%) for the AGG-only make option (b) Calculate AEC(12%) for the AGG-only make option (c) Calculate the unit cost for the AGG-only make option (d) Should AGGIE make or buy? [3] (20pts) Your AGG-only mask production team is considering outsourcing production of its designer, multi-use, disposable masks rather than engage in local production. A vendor has offered to produce the same masks at a unit price of $1.55/mask as long as the order is for at least 500,000 masks. The lead ISEN for AGG-only has estimated the expected demand to be 750,000 masks each year over the next 5 years. If AGG-only decides to manufacture the masks themselves they will investment in a multi- purpose production cell that will cost $250,000 and will have a salvage value of $50,000 after 5 years. Unit production cost is estimated in the table below. The AGG-only firm CFO has identified a MARR of 12% for assessing economic investment decisions. Direct material $0.25 Direct labor $0.10 Variable factory overhead $0.25 Fixed factory overhead $0.80 Total unit cost $1.40 Find the following: (a) Draw the cash flow diagram for the make option (b) Calculate AEC(12%) for the AGG-only make option (b) Calculate AEC(12%) for the AGG-only make option (c) Calculate the unit cost for the AGG-only make option (d) Should AGGIE make or buy