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2. Total assets end of the year (A) = $200,000, Net Farm Income (NFI) = $23,000, Interest Expense (Id) = $15,000, and Leverage ratio
2. Total assets end of the year (A) = $200,000, Net Farm Income (NFI) = $23,000, Interest Expense (Id) = $15,000, and Leverage ratio (D/E) = 1.5 a. Calculate owner 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 (ROFA)?
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