Mr. Roberto is evaluating the method he should use to depreciate a chip production machine that would help him improve his productivity. The machine has a cost of $50,000, and is expected to have a salvage value of $5,000 at the end of its useful life. Mr. Roberto is undecided as to which method to use, either straight line (the machine has 10 years of useful life) or production units (in production units he estimates a useful capacity of 45,000 units). Considering that he expects a production of:

Year 1	Units to be produced
1	3,500
2	4,000
3	5,500
4	4,500
5	5,000

What method do you recommend to Mr. Roberto considering that in the first 3 years he will have significant cash requirements? (straight line and units of production) Show the calculations you used to arrive at your recommendation.

Please show all steps and formulas used to calculate each part.