Question $1$ Momo's Steam Laundry needs to install a new automated plant in order to overall its plant modernisation and cost reduction programme. The plant can be leased or purchased. The company's pre$-$tax cost of capital is $10\backslash \%$ and the income tax rate is $30\backslash \%.$ Lease: The plant could be leased for R$52600$ pa$.$ The lessee is responsible for all servicing and maintenance cost amounting to R$8000$ per annum. The plant has an expected life of six years. However, Momo plans to build an entirely new plant in four years and has no interest in either leasing or owning the proposed plant for more than the stated period. Owning: The plant has an invoice price of R$150,000,$ which will be paid in full in cash upon installation. Annual service fees of R$12,000$ will be paid at the end of each year over the four years. Depreciation is calculated at $\backslash (25\backslash \%\backslash )$ per annum using the reducing balance method. Momo plans to sell the plant at the end of year four at its book value. Required: $1\mathrm{.}1$ Calculate the after$-$tax cash outflows and the net present value of the cash outflows under each alternative. $1\mathrm{.}2$ Which alternative would you recommend? Why?