TASK 1 Use the following information and calculate the after tax -Farm rate of return. -Owners rate of return -Cost of foreign capital and discuss your findings. Information Average total capital A 2 600 000 B 2 600 000 C 2 600 000 Average nett worth Net Farm Income 2 600 000 500 000 1 700 000 1 000 000 Remuneration to foreign capital 500 000 120 000 500 000 150 000 Tax Payable on profit (use tax table to calculate tax) TASK 2 (25) A 4 500 000 Use the following information and illustrate the concept of negative financial leverage. Explain the principle in detail including comparisons of the owner's rate of return. Average total capital Debt Ratio B C D 4 500 000 10% 4 500 000 4 500 000 30% 50% Farm rate of return Cost of loan capital 15% 20% 15% 15% 15% 20% 20% 20% (15) TASK 3 B Gross production value Cost of living 986 000 Production marketing & admin costs 560 000 Additional capital required 130.000 150 000 1 685 000 1 100 000 180 000 Capitalization required 10% 1 500 000 200 000 11% 2 000 000 Farm price Calculate what farmers A & B will be prepared to pay for the respective pieces of land. Use the given information. Calculate the minimum own capital which is needed for both farmers. Also indicate the maximum mortgage loan in both cases. n = 10; i = 12% Determine the minimum period which the two farmers can afford to take out a mortgage loan on the respective farms if the interest rate changes to 10% (25)