7. Farmland values and cash rents can be used to calculate a P/E ratio for farmland. Use the graph below to answer the following: 45 40 35 30 25 20 15 10 5 0 Kansas Non-irrigated Cropland Value-to-Rent Ratio Average Value-to-Rent Ratio = 20.5 2021 Value-to-Cash Rent Ratio = 40.1 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987- 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Source: USDA, NASS, Kansas State University a) Interpret the 2021 value-to-cash rent ratio. 3 pts 2019 2021 b) Let's assume you are a landowner bidding on 100 acres of Kansas non-irrigated cropland that will cash rent for $75 per acre. Use the 2021 value-to-cash rent ratio reported in the figure above to calculate the total amount you would be willing to pay for the 100 acres. 4 pts c) Using your answer from part (b), would you be willing to pay $250,000 for the 100 acres? Why? 3 pts