A commercial farmer wants to acquire a mechanised feed spreader that costs $80,000. He intends to operate the equipment

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A commercial farmer wants to acquire a mechanised feed spreader
that costs $80,000. He intends to operate the equipment for 5
years, at which time it will need to be replaced. However, it is
expected to have a salvage value of $10,000 at the end of fifth
year. The asset will be depreciated on a straight-line basis
($16,000 per year) over the 5 years, and the farmer is in a 30% tax
bracket. Two options of financing the equipment are available. A
lease calls for lease payments of $19,000 annually, payable in
advance. A debt alternative carries an interest of 10% and debt
payments will be at the start of each of the 5 years using mortgage
type of debt amortisation.
Required:
i. Using present-value method, determine the best
alternative
ii. Using the internal rate of return method, which is the best
alternative. Does your answer differ from that to part (i).