TO. (3 pts) To make an item in-house, equipment costing S250,000 must be purchased. I t will have a life of 4 years, an annual cost of 580,000, and each unit will cost $40 to manufacture. Buying the item externally will cost Si00 per unit. At i-15% per year, it is cheaper to make the item in-house if the number per year needed is above 1047 units. B. above 2793 units. C. equal to 2793 units D. below 2793 units. 11. (5 pts) Tom evaluated these alternatives using A W-based payback analysis with a 15% per year return required. For the cash nows option shown below (in S1000), the results indicate that A is better with a shorter payback period. If the AW method over the respective lives is used at 15% MARR per year, the conclusion is A. the same as the 15% payback selection. B. to select neither alternative, since AW is negative for both. C. inconclusive because the LCM must be used. D. to select B. 12. (5 pts) An engineer determined that the equivalent annual worth of an existing machine over its remaining useful life of 3 years will be S-70,000 per year. It can be replaced now or later with a machine that will have a EUAW of S-80,000 if it is kept for 2 years or less, S-68,000 if it is kept between 3 and 4 years, and S-75,000 if it is kept for 5 to 10 years. The company wants an analysis of what it should do for a 3-year study period at an interest rate of 15% per year. You should recommend that the existing machine A. be replaced now B. be replaced I year from now C. be replaced 2 years from now. D. not be replaced. Page 2 of