QUESTION 2 Part A ZAZ Sdn Bhd is considering how to finance the acquisition of a machine costing RM750,000 with an operating life of five years. There are two financing options. The machine could be leased for an annual lease payment of RM155,000, payable at the start of each year. Alternatively, the machine could be bought for RM750,000 using a bank loan charging interest at an annual rate of 7% per year. At the end of five years, the machine would have a scrap value of 10% of the purchase price. If the machine is bought, maintenance costs of RM20,000 per year would be incurred. Taxation must be ignored. Required: a. Evaluate whether ZAZ Sdn Bhd should use leasing or borrowing as a source of finance, explaining the evaluation method which you use. (10 marks) b. Discuss the two advantages of leasing as a source of both short-term and long-term finance. (4 marks)