Viswa Lamps Ltd. (VLL) is in the business of specialty lamps for factory illumination. Most of its products are made in its own factory while some are outsourced. Currently the company wants to introduce a new Lamp for railway sheds, which can be made in its factory or bought from its suppliers. If VLL wants to produce the Lamp it requires an investment of Rs.20,00,000 in plant and machinery, which can be fully depreciated on a straight-line basis over its useful life of 10 years. The cost of production (excluding depreciation) per Lamp is expected to be Rs. 82. A supplier is quoting a price of Rs.90 per Lamp and is ready to supply any quantity at the same price. The companys cost of capital is 12% and the tax rate is 30%. Assume all cash flows are certain. You are required to a. Advise the company (with detailed working notes) whether to Make or Buy the Lamps if the market demand is for 50,000 Lamps per annum. b. Compute the minimum annual demand (quantity) so that the company can produce on its own and the NPV is not negative.