QUESTION $4(20$ Marks$)$ Lonmin Mining Limited is deciding whether to lease or purchase mining machinery. Lease The machine can be leased for R$740,000$ annually for $4$ years, with an option to purchase for R$100,000$ at the end of the lease. Purchase Alternatively, the machine can be purchased for R$2,400,000$ with a loan at an interest rate of $10\%,$ and annual loan repayments of R$757122$ for $4$ years. After $4$ years the machine can be sold for a scrap value of R$120000.$ If the machine is purchased, maintenance costs of R$20000$ will have to be incurred every year. The company tax rate is $30\%.$ Assets are depreciated on a straight$-$line basis. REQUIRED $4\mathrm{.}1$ Calculate the amortization schedule for the loan, showing the interest and principal repaid each year. $(4$ Marks$)4\mathrm{.}2$ Calculate the after$-$tax cash outflows associated with borrowing and buying the asset. $(7$ Marks$)4\mathrm{.}3$ Compare the cash flows associated with leasing versus borrowing and buying the asset, using the Net Advantage of Leasing $($NAL$)$ method. $(7$ Marks$)4\mathrm{.}4$ Provide a recommendation on whether to lease or buy, based on the NAL method. $(2$ Marks$)$ QUESTION $5(20$ Marks$)5\mathrm{.}1$ Afrimat Limited has been reviewing its board structures and functions. The board has a mix of executive and non$-$executive directors. However, the CEO$$s family members are heavily represented, and there is one non$-$executive director. Audit matters are dealt with by the full board, and the process for nominating and appointing new board members seems non$-$transparent. $(10$ Marks$)$ REQUIRED Evaluate the arrangements and functioning of the Board of Directors in accordance with the King IV code of corporate governance and suggest improvements that can be made. $5\mathrm{.}2$ Discuss the effects on a company if it chooses to enter a finance lease rather than an operating lease.