QUESTION $3$

$(25$ Marks$)$

Twist Limited has determined that a new specialised delivery truck needs to be purchased. The truck will

generate a positive net present value of R$480000,$ calculated using the company's WACC of $20\%.$ The truck

can be leased from the manufacturer.

Additional information:

Assume a current corporate tax rate of $30\%.$

Cost of debt is $12\%$

Required:

$3\mathrm{.}1$ Determine the after$-$tax cash flows and the net present value of the cash outflows under each alternative.