A company required a component. From the following information suggest to the company

whether it should make the components or buy it from the market. A new machine will be

purchased Rs $2000000.$ The depreciation rate is $15$ percent diminishing balance method and after

five years it can be sold for Rs $200000.$ Manufacturing and buying cost of the components are

follows $($The tax rate is $20\%)$

Year Manufacturing cost Buying cost

$1$ Rs $1500000$ Rs $2000000$

$2$ Rs $1700000$ Rs $2200000$

$3$ Rs $1700000$ Rs $2400000$

$4$ Rs $1800000$ Rs $2600000$

$5$ Rs $2200000$ Rs $3000000$

Advise whether to buy or manufacture the components