A company is considering the possibility of manufacturing a particular component which at present is being bought from outside. The manufacture of the component would call for an investment of USD 7,50,000 in a new machine besides an additional investment of USD 50,000 in working capital. The life of the machine would be 10 years with a salvage value of USD 50,000. The estimated saving (before tax) would be USD 180,000 per annum and the income tax rate is 50%. The companys required rate of return is 10%. Depreciation is considered on straight line method. Should the company proceed to manufacture the component?