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.

f. Show fixed and variable profit (including operating costs) breakeven point based on yearly volume for the first five years for both machines. Assuming i = 5%, 10 cents/cell cost to operate the automatic and 40 cents/cell to operate the semi-automatic machine. Selling price for both is $1/unit. Please make a plot of the breakeven sales point.