Solar Inc Solar Inc Budgeted Income Budgeted Income Statement Statement Option 1 Option 2 Year 1-5 Year 1 Year 2-10 Revenue Sales $6,000,000 $4,000,000 $10,000,000 Total revenue $6,000,000 $4,000,000 $10,000,000 Expenses Wages $200,000 $450,000 $700,000 Depreciation $2,000,000 $2,000,000 $2,000,000 Marketing expenses $50,000 $200,000 $100,000 Interest expense $50,000 $50,000 Production cost $1,000,000 $3,000,000 $3,000,000 Consultant Fees $100,000 Rent $75,000 lease breaking compensation $50,000 Total expenses $3,425,000 $5,750,000 $5,850,000 Profit (Loss) $2,575,000 -$1,750,000 $4,150,000Time Net Cash Flow Workings Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10Option 1 Option 2 Cost of capital 12% 12% Period 5 years 10 years NPV $6,852,328 $9,193,146 EAA Recommendation