Compare the present value of costs for buying vs. leasing equipment, given specific initial outlays.

To advise management on the best option, we need to compare the present value of costs for both the "Buy" option (Decision 1) and the "Lease" option (Decision 2).

Step 1: Calculate the total capital outlay for the "Buy" option (Decision 1).
The "Buy" option involves purchasing the following assets:

• Factory building: $\text{Ksh } 10,000,000$
• Installation of plant and machinery: $\text{Ksh } 30,000,000$
• Trailer: $\text{Ksh } 2,000,000$
• 3 Phase Power supply: $\text{Ksh }