In Section 01 of this assignment, you will be given an initial data set and information related to the rice enterprise.

Section 02 will include specific instructions related to what Excel features to use and what reports to complete.

In Section 03, you will create an appropriate enterprise budget, complete with a breakeven table for analysis.

In Section 04, you will be required to summarize the work you have done and submit your recommendation if Michael should adopt the rice enterprise or not.

Section 01: Data and Related Information

• Table 01: Annual Prices and Yields of Medium-Short Grain Rice Production (Years 2008-2013).

Table 01: Average Annual Price and Yields of Medium-Short Grain Rice
	Price	Yield
Year	USD/CWT	CWT/Acre
2008	$24.80	82
2009	$18.40	81
2010	$18.80	77
2011	$17.10	79
2012	$17.40	81
2013	$19.20	84

• Table 02: Enterprise Budget Information Related to Cultural Costs of Growing One Acre of Medium-Short Grain Rice.

Table 02: Enterprise Budget Input Information for Producing 1 Acre of Rice
Input Item and Cost Category	Quantity Used	Unit	Cost Per Unit
VC	Prepare ground for planting	1.0	acre	$42.00
VC	Seed	1.8	cwt	$32.25
VC	Aqua Ammonia	130.0	lbs	$0.58
VC	12.23.20	200.0	lbs	$0.13
VC	Zinc Sulfate	15.0	lbs	$0.61
VC	21.0.0. Ammonia Sulfate	113.0	lbs	$0.23
VC	Herbicide	1.0	acre	$125.00
VC	Insecticide	1.0	acre	$9.00
VC	Fungicide	1.0	acre	$14.00
VC	Irrigation	1.0	acre	$108.00
VC	Harvest & Hauling	1.0	acre	$198.00
VC	Labor	5.0	hr	$20.55
VC	Machine fuel, gas	1.6	gal	$3.82
VC	Machine fuel, diesel	30.0	gal	$3.45
VC	Interest (Bank Loan)	1.0	acre	$23.00
VC	Land Rent	1.0	acre	$280.00
VC	Misc. Variable Costs	1.0	acre	$50.00
FC	Machinery	1.0	acre	$5.00
FC	Irrigation system	1.0	acre	$2.00
FC	Land Rent	1.0	acre	$95.00
FC	Buildings	1.0	acre	$6.00
FC	Equipment	1.0	acre	$43.00

Source: USDA, NASS, Quick Stats, http://quickstats.nass.usda.gov/#E6415500-FAAD-377F-8C4F-C5AA665B90ED

Section 02: Specific Reports and Worksheets Requested

In this section you are requested to perform specific tasks providing information to assist Michael in making the decision to grow rice or not. To start, open a new workbook.

1. In the new workbook begin in cell B5 and create a table that will include the data of prices and yield from Table 01 above. (Hint: Review Week 08.) Be sure to include the following in your table:
   • An additional column for total revenue. Put the appropriate formula in the cells of that column which results in the total revenue per acre for each year. (Hint: This column will be column E.)
   • An appropriate title for the table and each of the columns. Be sure to center & merge the cells (B5-E5) of the title. Title the table "Table 1: Average Annual Price and Yields of Medium-Short Grain Rice."
   • Format columns and rows with proper centering of the figures and texts.
   • Make your table attractive. Format the text and numbers of each row with colors or other text-formatting features.
   • Create a new row at the bottom of the table by using the appropriate pre-formatted formula to compute the six-year average price, yield, and total revenue. (Hint: Use the "Function" search to find the pre-formatted formula for Average.) In C15, you should have an average value for the annual price. D15 will have the average yield and E15 will have the average total revenue for the six years.
2. Michael would like to have you create two "line charts" for him. (Hint: Review Week 08 and the "Insert" tab on the Ribbon.)
   • The first chart should be titled "Annual Average Market Prices of Medium-Short Grain Rice" and include the annual market prices from Table 01. Select the annual market prices to be the "Y" variable on the graph, which will be represented and labeled on the vertical axis. The "X" variable will be the year values.
   • The second chart should be titled "Annual Average Production Yields of Medium-Short Grain Rice"and include the annual yields from Table 01. Select the annual yield values to be the "Y" variable on the graph, which will be represented on the vertical axis.
   • Add titles to each axis. On the first chart the y-axis should be labeled "$/CWT" for dollars per one hundred pounds. On the second chart the y-axis should be labeled "CWT Per Acre." The x-axis for both charts should be labeled "Year."

Note

You can insert the graphs (line charts) on the same worksheet as the table that you created in Step 1 above. Alternatively, you may create the line chart in a new worksheet if you wish.

Section 03: Enterprise Budget Development

Using Table 02, found in Section 01, create an appropriate enterprise budget, complete with a breakeven table for analysis. Open a new worksheet and begin the enterprise budget in cell A5. (Hint: Review Week 09. You may want to copy one of the enterprise budget examples in Week 09, then move it to the workbook for this week.) Be sure to include the following:

• Appropriate headings and sections as outlined in the enterprise budget examples and instructions of Week 09.
• Market price and yield data. Use the average price and average yield values that you created in Table 01 of Section 2.1.5 above.
• A column for the total cost per acre for each individual input.
• Breakeven price formulas as included in the "Variable Cost" and "Fixed Cost" section of the budget, as well as a breakeven price formula for total costs.
• A separate breakeven table with three values for alternative prices and three values for alternative yields. Use the average price and average yield (computed in 1E above) as the center values. Increase the average price and average yield by 10% to establish values above the average. Likewise, decrease the average price and average yield by 10%. You should have a range of three prices and three yields to build your breakeven table around. (Hint: See Table 8.2 in Week 8.) The following screenshot of an unfinished breakeven table will help you build your table. Be sure to include appropriate headings and titles.

	Average Price - 10%	Average Price	Average Price + 10%
Average Yield - 10%
Average Yield
Average Yield + 10%

Section 04: Analysis of Michael's Proposed Rice Enterprise

In this final section, utilize the results of Section 02 to analyze and provide recommendations to Michael. In the end, Michael wants to know if the proposed rice enterprise is financially feasible and if he should move forward to implement that enterprise.

1. Using the two line charts that you created in Section 2.2, provide Michael with your observations with respect to the annual market prices and the annual yields per acre.
   1. Does the trend in the annual market prices look promising, in other words, favorable for Michael to enter into this enterprise? (For example, are the market prices rising, remaining constant, or decreasing over the six years?) Explain your answer.
   2. Given the trend in market prices, would you recommend that Michael should produce rice?
   3. Does the trend in yields per acre of rice look promising to Michael? In other words, is the trend in annual yields per acre increasing, decreasing, or remaining constant over the six years?
   4. Given the trend in the yield per acre, would you recommend that Michael start producing rice?
2. Using the enterprise budget for rice production, answer the following:
   1. What is the total variable cost of rice production on a per-acre basis?
   2. What is the breakeven variable price that would be needed to cover the variable costs?
   3. Is the average market price for the past six years greater than the value of the breakeven variable price? Would you recommend Michael produce rice this year (the short run)? Explain your answer.
   4. What is the total cost of producing rice on one acre?
   5. What is the breakeven total cost that is needed to cover all of the costs per acre?
   6. Using the breakeven table, identify what price and yield the returns will become negative, making the rice enterprise not feasible? Explain your answer.
3. repare a short summary (one or two paragraphs) of your recommendation to Michael regarding his decision to produce rice or not to produce rice. (Hint: Is the rice enterprise financially feasible? Explain your answer, using information from the enterprise budget to justify and support your answer.)