Jordon Company is considering replacing its automated stamping machine. The machine is specialized and very expensive. Jordon is considering three acquisition al ternatives. The first is to lease a machine for 10 years at $\$ 1$ million per year, after which time Jordon can buy the machine for $\$ 1$ million. The second alternative is to pay cash for the machine at a cost of $\$ 7$ million. The third alternative is to make a down payment of $\$ 3$ million, followed by 10 annual payments of $\$ 550,000$. The com pany is trying to decide which alternative to select.

1. Assuming the present value of the lease payments is $\$ 7.2$ million and the present value of the 10 loan payments of $\$ 550,000$ is $\$ 4.1$ million, determine which alternative Jordon should choose.

2. Interpretive Question: Your decision in part (1) was based only on financial factors. What other qualitative issues may influence your decision?