Option 1: In-house production Purchase and installation costs for the machinery with an expected life of five years are estimated to be S500,000. ANL currently has a warehouse which generates a rental income of $225,000 each year. ANL shall convert this warehouse into a factory for manufacturing the equipment. The conversion cost is expected to be $25,000. The collective cost of various products to be manufactured is estimated to be $4,000,000 with an expected increase of 2.5% per annum each year in number of units and associated costs. Further, while the machinery will produce necessary hardware, ANL will have to deploy its own software development team to generate their firmware and other associated application software to make these device:s functional. That requires developing a team of software programmers and the expected salary for the team members would be $300,000 per annum with an increment of 2% each year. ANL also requires to invest in necessary development software and maintain the licenses current. The negotiated licensing fee for the software is estimated to be $50,000 per year. The machinery is expected to depreciate to zero on a straight-line basis with an expected salvage value of $25,000 at the end of Year 5. Finally, the required net working capital is $20,000. Option 1: In-house production Purchase and installation costs for the machinery with an expected life of five years are estimated to be S500,000. ANL currently has a warehouse which generates a rental income of $225,000 each year. ANL shall convert this warehouse into a factory for manufacturing the equipment. The conversion cost is expected to be $25,000. The collective cost of various products to be manufactured is estimated to be $4,000,000 with an expected increase of 2.5% per annum each year in number of units and associated costs. Further, while the machinery will produce necessary hardware, ANL will have to deploy its own software development team to generate their firmware and other associated application software to make these device:s functional. That requires developing a team of software programmers and the expected salary for the team members would be $300,000 per annum with an increment of 2% each year. ANL also requires to invest in necessary development software and maintain the licenses current. The negotiated licensing fee for the software is estimated to be $50,000 per year. The machinery is expected to depreciate to zero on a straight-line basis with an expected salvage value of $25,000 at the end of Year 5. Finally, the required net working capital is $20,000