c$)$ Frank is not happy with his ROE because it is below his benchmark of $9\%.$ After discussing some options

with him, you devise a plan to boost the farm's ROE. Here it is:

Sell $$500,000$ of land to local landowner. With the sale proceeds $-$ pay off $$350,000$ of liabilities and receive

$$75,000$ of cash after paying capital gains tax. Enter into a share crop agreement with the local landowner

$(70/30$ so the landowner gets $70\%$ of the revenue and pays $70\%$ of the expenses and Frank will get $30\%$ of the

revenue and pay $30\%$ of the expenses$),$ so Frank will still generate some profit from the land he sold. The share

crop agreement will adjust your DuPont numbers as follows: total sales decrease $4\%$; variable expenses

decrease $7\%$; fixed expenses decrease $25\%$; Finally, annual interest expense now equals $$70,000.$

Use the DuPont Excel Spreadsheet to calculate the financial impact of these changes on Frank's farm $($upload

the completed spreadsheet to Canvas$).$ Change the financial numbers presented in question $1($still focus on

farm only$).$ Below, clearly explain to Frank why these changes improved his farm's: $18$ pts

Earns:

Turns:

Spread:

Leverage:

ROE:

Finally, give one reason why selling the land to the landowner might NOT be in Frank's best interest: