Total assets end of the year (A)= $300,000, Net farm income (NFI)= $25,000, interest expense (Id) =$20,000,

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Total assets end of the year (A)= $300,000, Net farm income (NFI)= $25,000, interest expense (I’d) =$20,000, and leverage ratio (D/E) =0.5.

A. Calculate owners equity (E)

B. Calculate liabilities (D)

C. Calculate the rate of return on farm equity (ROFE) and the cost of farm debt (COFD)

D. What is the absolute return to assets (R) and the rate of return to farm assets

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Jul 03, 2023 12:42 AM

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Total assets end of the year (A)= $300,000, Net farm income (NFI)= $25,000, interest expense (Id) =$20,000,

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A To calculate owners equity E we use the formula E A D Given that the leverage rati... View the full answer

Income Tax Fundamentals 2013

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