THREE (25 Marks) MiWay Transport has determined that a new specialised delivery truck needs to be purchased. The truck can be leased from the manufacturer. The lease agreement requires: 5 annual payments of R800 000, with the first payment due on the delivery of the vehicle. Service costs amount to R17 000 p.a The lessee will exercise its option to purchase the truck at the end of the leasing period for R120 000. The truck can also be purchased at: a cost of R2.8 million, inclusive of a 4-year maintenance contract with the manufacturer. The R2.8 million will be borrowed at an after-tax rate of 13% per annum. The loan would be secured against the truck and would be amortised over the useful economic life of the vehicle. The loan payments for each of the first four years are R791 000 payable at the end of each year. The vehicle can be depreciated straight-line over the same period and will have a zero-market value at the end of 4 years. Interest payments n included in the year end loan payments for the respective four years are R364 000 R273 000 R197 920 and R143 229. Assume a current corporate tax rate of 30%. Required: 3.1 Determine the after-tax cash flows and the net present value of the cash outflows under each alternative. (23 Marks) 3.2 Briefly indicate which alternative should be recommended. (2 Marks