AGBM 106 EXAM 2 QUIZZES UPDATED QUESTIONS AND
ANSWERS
Quiz 5 - CORRECT ANSWER✅✅✅Quiz 5
A constant payment loan is negotiated. The loan is for $100,000, the annual interest rate is 10%. The
loan is for 10 years with one payment per year. What is the annual payment on this loan? - CORRECT
ANSWER✅✅✅$16,274.54
The lower the current ratio the more liquid the business. - CORRECT ANSWER✅✅✅False
A constant payment loan is negotiated. The loan is for $100,000, the annual interest rate is 10%. The
loan is for 10 years with 12 payments per year. What is the monthly payment on this loan? - CORRECT
ANSWER✅✅✅$1,321.51
Imagine it is 12/31/2025 and a farm is completing its 2025 balance sheet. What is the farm's current
portion of term debt? - CORRECT ANSWER✅✅✅the amount of principal to be paid on long term
loans in 2026
A dairy cow is purchased for $2,000. Assume the cow is considered a 5 year asset and has a salvage
value of $500. What is the cost value of the cow at the end of year 3? - CORRECT
ANSWER✅✅✅$1,100
The higher the debt to asset ratio the more solvent the farm. - CORRECT ANSWER✅✅✅False
A farm has total A of $100 and total D of $60. What is owner equity? - CORRECT ANSWER✅✅✅$40
A farm truck is purchased for $50,000. Assume the truck is a 5 year asset and has a salvage value of
$10,000. What is the annual depreciation expense of this truck? - CORRECT ANSWER✅✅✅$8,000
A farm has total A of $100 and total D of $60. What is the debt to asset ratio? - CORRECT
ANSWER✅✅✅0.60
, A farm has current assets valued at $10, non current assets valued at $100, and owner equity of $100.
What is total D for this farm? - CORRECT ANSWER✅✅✅$10
Quiz 6 - CORRECT ANSWER✅✅✅Quiz 6
What is the correct numerator for ROA? - CORRECT ANSWER✅✅✅total interest expense + net
income from operations
How is total interest expense calculated? - CORRECT ANSWER✅✅✅cash interest paid + change in
accrued interest
OWNERS PREFER ROE > ROA > 0 - CORRECT ANSWER✅✅✅True
Ted has collected corn inventories by month for the USA over the past twelve years. Ted would like to
make a pivot table that shows average corn inventory by month. What variable should be used for
COLUMN? - CORRECT ANSWER✅✅✅Month
What is the correct formula for ROE? - CORRECT ANSWER✅✅✅NICO/AVERAGE E
Ted has collected corn inventories by month for the USA over the past twelve years. Ted would like to
make a pivot table that shows average corn inventory by month. What variable should be used as the
Sigma Value? - CORRECT ANSWER✅✅✅Corn Inventory
A farm purchases 100 acres of land for $70,000. How will this transaction impact the farms net income
from operations (NICO) for that year? (FOCUS ON JUST THE TRANSACTION ITSELF NOT ABOUT THE
COSTS AND REVENUES THAT THE NEW LAND MAY GENERATE) - CORRECT ANSWER✅✅✅it will not
impact NICO
Where are loan principal payments recorded on an income statement? - CORRECT
ANSWER✅✅✅they are not recorded on an income statement
ANSWERS
Quiz 5 - CORRECT ANSWER✅✅✅Quiz 5
A constant payment loan is negotiated. The loan is for $100,000, the annual interest rate is 10%. The
loan is for 10 years with one payment per year. What is the annual payment on this loan? - CORRECT
ANSWER✅✅✅$16,274.54
The lower the current ratio the more liquid the business. - CORRECT ANSWER✅✅✅False
A constant payment loan is negotiated. The loan is for $100,000, the annual interest rate is 10%. The
loan is for 10 years with 12 payments per year. What is the monthly payment on this loan? - CORRECT
ANSWER✅✅✅$1,321.51
Imagine it is 12/31/2025 and a farm is completing its 2025 balance sheet. What is the farm's current
portion of term debt? - CORRECT ANSWER✅✅✅the amount of principal to be paid on long term
loans in 2026
A dairy cow is purchased for $2,000. Assume the cow is considered a 5 year asset and has a salvage
value of $500. What is the cost value of the cow at the end of year 3? - CORRECT
ANSWER✅✅✅$1,100
The higher the debt to asset ratio the more solvent the farm. - CORRECT ANSWER✅✅✅False
A farm has total A of $100 and total D of $60. What is owner equity? - CORRECT ANSWER✅✅✅$40
A farm truck is purchased for $50,000. Assume the truck is a 5 year asset and has a salvage value of
$10,000. What is the annual depreciation expense of this truck? - CORRECT ANSWER✅✅✅$8,000
A farm has total A of $100 and total D of $60. What is the debt to asset ratio? - CORRECT
ANSWER✅✅✅0.60
, A farm has current assets valued at $10, non current assets valued at $100, and owner equity of $100.
What is total D for this farm? - CORRECT ANSWER✅✅✅$10
Quiz 6 - CORRECT ANSWER✅✅✅Quiz 6
What is the correct numerator for ROA? - CORRECT ANSWER✅✅✅total interest expense + net
income from operations
How is total interest expense calculated? - CORRECT ANSWER✅✅✅cash interest paid + change in
accrued interest
OWNERS PREFER ROE > ROA > 0 - CORRECT ANSWER✅✅✅True
Ted has collected corn inventories by month for the USA over the past twelve years. Ted would like to
make a pivot table that shows average corn inventory by month. What variable should be used for
COLUMN? - CORRECT ANSWER✅✅✅Month
What is the correct formula for ROE? - CORRECT ANSWER✅✅✅NICO/AVERAGE E
Ted has collected corn inventories by month for the USA over the past twelve years. Ted would like to
make a pivot table that shows average corn inventory by month. What variable should be used as the
Sigma Value? - CORRECT ANSWER✅✅✅Corn Inventory
A farm purchases 100 acres of land for $70,000. How will this transaction impact the farms net income
from operations (NICO) for that year? (FOCUS ON JUST THE TRANSACTION ITSELF NOT ABOUT THE
COSTS AND REVENUES THAT THE NEW LAND MAY GENERATE) - CORRECT ANSWER✅✅✅it will not
impact NICO
Where are loan principal payments recorded on an income statement? - CORRECT
ANSWER✅✅✅they are not recorded on an income statement
