South Fertilizers Limited begins operations with $10,000 cash on 1^st January, 2020. With the available cash, the company immediately purchased 1000 bags (50 kg per bag) of fertilizer at the price of $10 per bag. On 31^st January, 2020 the company sells all the bags of fertilizer for $15 per bag. On this date, the current cost of each bag of fertilizer has risen to $20 per bag. Assume that 50% of profits made at the end of the accounting period is paid out as dividends after a tax payment at the rate of 30%.

REQUIRED:

A. What is the difference between financial capital maintenance and physical capital maintenance?

B. Using the current cost accounting as a measurement, calculate the maximum dividend the company can pay out while still maintaining its:

1. Financial Capital
2. Physical Capital