13. A company has decided to buy a new machine either by an outright cash purchase at *175 million or by hiring it at 742 million per year for the life of the machine. The other relevant data are as follows: Purchase price of the machine (?) 175 million Estimated life (years) Estimated salvage value if the machine is bought (?) Annual cost of maintenance 5 21 million (whether hired or purchased) () 3.5 million For simplicity assume that the company depreciates its assets on straight-line basis and pays tax at 35 per cent. Assuming a cost of capital of 10 per cent, which alternative is preferable?