Engineering ManagementEMGT 600. Engineering ManagementAssignment 2Answer to each question should be no more than 1/ 2 page long.Use 12-pointfont and single-spaced spacing.Chapter 6: Cost Accounting for Engineering Managers 1)ABC company is evaluating two specific proposals to market a new product.The current interest rate is 10 percent.Proposal Acalls for setting up an in-house manufacturing shop to makethe product, requiring an investment of $500,000. The expected profits for thefirst to fifth years are $150,000, $200,000, $250,000, $150,000, and $100,000,respectively.Proposal Bsuggests that the manufacturing operation be outsourced bycontracting an outside shop, requiring a front-end payment of $300,000. Theexpected profits for the first to fifth years are $50,000, $150,000, $200,000,$300,000, and $200,000, respectively. The expected profits would be lower inearlier years due to third-party markup.Why should the company accept Proposal B over Proposal A? E