1. EGR 403-Project #2 David Gadea Misha Novini David Rose Group 1 Dr. Rosenkrantz March 8, 2005

2. “The Man” 29 Years of Age Southern California Resident Single; no children $500,000 currently invested Education  B.S. in Manufacturing Engineering  M.S. in Business Experience  4 years of field experience  2 years field supervisor

3. The 2 Scenarios Working for Raytheon Benefits  Set Salary  Set Hours  Health Insurance  Car, Gas, Travel, & Cell Phone Allowance  Retirement Plan  Bonus Starting His Own Solar Manufacturing Company Benefits  Money  No set Schedule  No Boss

4. Scenario 2 Starting His Own Solar Manufacturing Company Benefits  Money  No set Schedule  No Boss

5. Analysis Criteria Yearly Income 2.5% Inflation Rate Net Present Worth  2, 5, 10, 15, 20, 25, 30, 36 Years

6. Raytheon Continuing Salary of $120,000 with 4.5% increase each year Work for 36 years $840 per year in Health Insurance Company contributes 50% of what he contributes to his 401K plan 2% Bonus per Year Pension Plan  $195, 484 per year after retirement

7. Solar Manufacturing Company Quantity sold = maximum possible production (15MW) $4.00 / Watt income drops 0.1% per year $3.70 / Watt Total Cost (includes fixed & variable costs) drops 0.1% per year 13 Million every 10 years in machinery with no salvage value (adjusted for inflation) Borrow 15 Million from Venture Capitalist @ 210% return in 7 years

8. Present Worth Comparison

10. Sensitivity Analysis Selling price drops 0.5% per year Quantity sold doesn’t reach maximum capacity The production cost per watt remains unchanged

11. Sensitivity Analysis

12. Conclusion Raytheon offers job security and a steady income Self-employment requires a lot of time, especially the first year. Self-employment risks big losses Self-employment can also produce huge returns

13. References GT Solar Technologies www.nrel.gov/pvmat www.aarp.org Newnan, et al. Essentials of Engineering Economic Analysis. Oxford University Press. New York, 2002. Dr. Rosenkrantz