(a) **Initial lease liability**

\[
\text{PV}=\sum_{t=1}^{5}\frac{25{,}000}{(1.07)^t}
=25{,}000\left(\frac{1-(1.07)^{-5}}{0.07}\right)
=\$102{,}504.94
\]

(b) **Initial right-of-use asset**

\[
\text{ROU asset}=\text{Initial lease liability}
=\$102{,}504.94
\]

The measurement is governed by **AASB 16 Leases**.