Above should be the numbers you may need...

Tammy is not happy with her ROE because it is below her benchmark of 10%. After discussing some options with her, you devise a plan to boost her ROE. Here it is: Sell $350,000 of land to a local landowner named Bart. Pay off $150,000 of liabilities with land sale proceeds. The remaining $200,000 of equity from the land sale is used to replenish working capital. Enter into a share crop agreement with Bart (70/30 so the landowner gets 70% of the revenue and pays 70% of the expenses and Tammy will get 30% of the revenue and pay 30% of the expenses), so Tammy will still generate some profit from the land she sold. Working under this new arrangement, gross revenue will fall by 3%; variable expenses will fall by 15%; fixed expenses will fall by 20%. Finally, annual interest expense will now be equal to $96,250. Use the DuPont Excel Spreadsheet to calculate the financial impact of these changes on Tammys farm (print and attach the completed spreadsheet to the homework). Change the financial numbers presented in question 1 (still focus on farm only).

Below, clearly explain to Tammy why these changes improved her farms:

Earns:

Turns:

Spread:

Leverage:

ROE:

ross 230,00 o Fixed Ex 5 S S O O 84 o o o 1312 STO interest Net come Total Assets ROE Net Sm. me Total Assss Avesta se Share holdn 5 2,7 SO LOO 4 1 2 SOO Turnover mato 412 S 0,36 13 12 so o Net come ROA Assefa Total S 2, 1 5 o x (OD 2.50 o adding interest back RO A can also be calculated by usina -to the net aneome x loo 13 l, 2 SO 6.94 J Cost ot dabt Interes Cabili Total faum sooo 1312 SOTO 13 2 STOO Total Ass 1312 soo 77so ou 5375 Shorehold an Equug 2.44 l 6 x 0,36 x 2.4 q 8 y, RO E