Question 1 [15 Marks] The property and financial structure of a company is closely related with the business activities of the company. Discuss this statement in detail with reference to the following: 1.1 The long-term property of a company 1.2 Current property of a company 1.3 Other property of a company Question 2 [15 Marks] Boyson (Pty) Ltd manufactures and sells high-tech products to the retail stores. Due to the increase in their production output requirements, they are planning to buy a new production equipment, which costs R250 000, but the company has the following unequal net cash inflows during its life: Year 1 = R105 000, year 2 = R75 000, year 3 and 4 = R55 000 and year 5 = R45 000 each. The equipment would have R40 000 residual value at the end of its life. Calculate the companys accounting rate of return and briefly explain whether the company should consider buying the new equipment, based on the ARR results. Show all calculations clearly. Question 3 [20 Marks] The following information is available for two medium-size companies operating in similar industry, BodMan Ltd. and ClearCut Ltd. BodMan Ltd. ClearCut Ltd. Net operating income 1,8 Million 1,8 Million Interest on debt Nil 750 000 Cost of equity 14% 14% Cost of debt 12% 12% 3.1. Calculate: (i) The market value of equity, (2) (ii) Market value of debt and (2) (iii) Total value of both the companies. (2) 3.2. Calculate the average cost of capital for each of the firms. (4) 3.3. Briefly explain, with calculations, what happens to the average cost of capital of BodMan Ltd. if it employs R20 million of debt to finance a project that yields an operating income of R4 million?