The demand for the product made by Bam Ltd is 500 units per week. The product is manufactured in three consecutive processes A, B, and then C. The current capacity of the processes are given below.

Process	A	B	C
Weekly Capacity	400	300	250

The long-run benefit to Bam Ltd of increasing the sales of its product by one unit per week is approximated by the present value of $25,000.

The following proposals have been made to top management of Bam Ltd:

(i) Invest in a new machine for process A. This machine will increase the weekly capacity of the process to 550 units and will cost $1m.

(ii) Replace the machine in process B with a more sophisticated machine. This new machine will cost $1.5m and will double the capacity of process B.

(iii) Buy an additional machine for process C. This will increase the capacity of process C by 300 units per week and will cost $2m.

Required: Advise top management on the best course of action for Bam Ltd. The proposals presented are not mutually exclusive.