b) Bobo Ltd has decided to acquire a piece of equipment costing Shs 240 000 of five years. The equipment is expected to have no salvage value at the end of its useful life and the company uses straight-line depreciation method on all the fixed Assets. The company has two financing alternative methods available, leasing or borrowing. The loan has an interest rate of 15% requiring equal-year-end installments to be paid. The lease would be set at a level that would amortize the cost of equipment over the lease period and would provide the lessor with a 14% return on capital. The company's tax rate is 30%. Required: in i) Calculate the annual lease payments. (6 marks) ii) Calculate the PV of the cash out flow under lease financing (8 marks) Which alternative is better and why? (3 marks) iii)