OReilly Kitchen Products makes different kinds of electrical blenders, mixers, and grinders for the restaurant trade. Obviously, these products are powered by small electric motors. Presently, OReilly buys these motors from an outside vendor, but has some excess capacity and considering using that to make the motors in house. Here is the relevant data collected:

Make motors in house:
Initial outlay	$1,500,000
Useful life	10 years
Salvage value at end of life	0
Unit direct materials and direct labor cost	$16
Annual fixed costs (excluding depreciation)	$200,000
Required rate of return	12%
Corporate tax rate	30%
Annual demand for motors	250,000
After-sales customer support cost per unit	$1
Buy motors from vendor:
Unit price	$18
After-sales customer support cost per unit	$2

Prepare an analysis for the CFO of OReilly to help in the decision of whether they should make or buy.