Assume an agribusiness firm has a net income of $90,000 and all debt is issued in corporate bonds to investors (e.g. no dividends). The firm own $200,000 in debt and $260,000 in shareholder equity. Calculate the Return on Invested Capital (ROIC). Explain your answer.

Assume the price of ABC Companys nitrification product (Super-Dry-Yield) for corn increased from $38/gallon to $42/gallon. The change in price resulted in a 6% decrease in sales of Super-Dry-Yield.

1. (10pts) Calculate the elasticity of demand for Super-Dry-Yield with respect to the own price. Show your work.
2. (5pts) What type of elasticity is this? Explain.
3. (10pts) How would an agribusiness manager interpret the elasticity value?
4. (5pts) Based on the information above, what can ABC Company do increase revenue for Super-Dry-Yield? Explain your answer from the standpoint of prices.