You are a manufacturing engineer at a firm that requires electric motors as part of major assemblies. You can purchase the motors for $350 each today with a 5% per year increase. On the other hand, you can manufacture the motors.
The manufacturing of the motors will require an investment of $300,000 today plus an investment of $100,000 one year from now. The raw materials and labor required to make the motors is $15 per motor. There is no increase in cost over the planning horizon. If the project horizon is 8 years from today, what is the minimum number of motors PER YEAR required to make manufacturing a less expensive option for years 2 through 8. The machine to make the motors has no salvage value and the MARR is 12%.