en Logistics is considering the acquisition of a trailer for R300 000, either on an outright purchase or lease. This will be a 4 year lease/contract and it will require a down payment of R110 000 and further payments of R110 000 per year at the end of each year. If the trailer is owned, the service and maintenance charges will be R10 000 p.a. but if the trailer is leased this charge is carried by the lessor. The salvage value of the trailer in 4 years time is expected to be R40 000. The company uses the straight-line method of depreciation. The prevailing tax rate is 30% and the after tax cost of debt is 10%. Required: Calculate the cost of owning against the cost of leasing and advise on the best option. Justify your