QUESTION $2(25$ Marks$)$ Z$1$ Limited wants to expand operations across provinces. To open a new branch in the Free State, equipment of R$675000$ should be purchased. Z$1$ Limited can either commit to a five$-$year loan at an interest rate of $10\%$ or can enter into a finance lease with Efficient Operations to obtain the new equipment required for its branch. Finance lease payments of R$140000$ per year, payable in arrears, will need to be made for a period of five years if the asset is leased. If Z$1$ Limited decides to purchase the equipment, it will qualify for a wear$-$and$-$tear allowance of $25\%$ per year on the straight$-$line method of depreciation. The estimated residual valued of the asset at the end of the five years is $10\%$ of the original cost Under either option, Z$1$ Limited will be responsible for maintaining the equipment at a cost of R$50000$ per year, from year two. The current tax rate is $27\%$ and is payable in the year in which it is incurred. SARS allows interest, lease and maintenance costs to be deducted for tax purposes. Required: Assess whether Z$1$ Limited should take out a loan to finance the equipment or should consider a finance leased asset contractual obligation. The assessment should include the amortization table calculations and tax calculations. Rounding should be to two decimal places.