AGRIBUSINESS MANAGEMENT EXAM LATEST UPDATE QUESTIONS AND ANSWERS

AGRIBUSINESS MANAGEMENT EXAM LATEST UPDATED QUESTIONS AND ANSWER S 1. Total revenue = ? ANSWER - price X quantity 2. Market equilibrium is where ? ANSWER - market supply = market demand 3. Principal and interest that must be paid within the year a re examples of ? ANSWER - current liabilities 4. Current assets - current liabilities = ? ANSWER - working capital 5. A loan to purchase seed, fertilizer, and chemicals is generally called ? 6. ANSWER - an operating loan 7. Cash income minus cash expense equal ? ANSWER - net cash income and cash profit 8. Lenders want to see a cash flow to determine ? ANSWER - how much money the borrower will need and when the borrower can pay ba ck the loan 9. A loan to purchase seed, fertilizer and chemicals is generally called ? ANSWER - an operating loan 10. An individual seller typically has very little control over the price he/she receives for their product at a given point in this type of market ? ANSWER - purely competitive 11. Things of value that are owned are generally referred to as ? ANSWER - assets 12. Solvency is best measured by ? ANSWER - net capital ratio 13. The size of one soybean futures contract on the Chicago Board of Trade is ? ANSWER - 5,000 bu. 14. At the beginning of last year, a farmer had an outstanding loan of $100,000. The interest rate was 10% APR. If the farmer made one loan payment at the end of the year of $25,400 what was the outstanding balance at the end of the year. ? ANSWER - $84,600 15. An ordinary corporation is a business that is normally ? ANSWER - owned by investors who are not customers & controlled on a 1 share of stock, 1 vote basis 16. Money provided to or invested in an agricultural business by the owners is normally referre d to as ? ANSWER - equity capital 17. The nearby hog futures contract closed at $49.80 with a local basis of $1.85. The local cash market price was ? ANSWER - $49.85 18. A partial budget is ? ANSWER - used to evaluate a change in some aspect of the business suc h as purchasing new equipment 19. The following is bought and sold on the Chicago Board of Trade ? ANSWER - corn futures contracts 20. A cash flow budget is ? ANSWER - a projection 21. The manager of a cooperative is generally ? ANSWER - hired by the board of direc tors 22. Economies of size tells us that ? ANSWER - bigger businesses use management resources more efficiently that smaller ones& bigger businesses use assets more efficiently than smaller ones 23. Cooperative profits can be paid back to customers using ? ANSWE R - patronage refunds 24. When a farmer pays a loan in full, the component of the payment equal to the amount borrowed is ? ANSWER - principle 25. An annuity is ? ANSWER - a series of equal annual payments 26. Equity is ? ANSWER - the net worth of the business & th e owner's share of the business 27. Suppose a dairy farmer's cost of milk production increased by 6.5% from the $8.50 per hundred weight that is was last year. What is the farmer's new cost of milk production. ? ANSWER - $9.05 28. The tax deductible allowance for the loss in value of a fixed asset due to wear and tear or obsolescence is known as ? ANSWER - depreciation expense 29. Wages or salaries that are lost as a result of attending college instead of working represents ? ANSWER - opportunity cost 30. The financial method of reporting income by recording income in the year that the cash is received is known as this method ? ANSWER - cash 31. A measure of a farmer's ability to pay their bills this year is given by the farmer's ? ANSWER - current ratio 32. Net worth of a fa rm of agricultural business is equal to ? ANSWER - equity 33. An income statement is also called ? ANSWER - a profit and loss statement 34. The traditional parts or factors of production used by farm of agribusiness firms in production include all of the followi ng except ? ANSWER - money 35. Working capital = ? ANSWER - current assets - current liabilities 36. The portion of land debt due after this year is classified as ? ANSWER - a non -current liability 37. Which of the following is most likely to qualify for depreciatio n for tax purposes ? ANSWER - livestock purchased for breeding or dairy purposes 38. An enterprise budget is ? ANSWER - expected costs and returns associated with a specific production activity 39. The price paid for the right but not the obligation to buy or se ll futures contract is called ? ANSWER - the premium 40. Most farms in the US are ? ANSWER - sole proprietorships 41. A mortgage is ? ANSWER - a loan secured with the creditor's claim on the property of the borrower