AGEC 330 TEST QUESTIONS WITH
CORRECT ANSWES 2025/2026
Question 1 16..7 pts
Land's basic properties over time.
changes
Correct! remains constant
none of the above
Question 2 16..7 pts
Joan wants to buy land to expand her farm. She estimates one property would generate $780
per acre in crop sales while costing $505 per acre in operating costs. If the real expected rate of
return is 11.90%, calculate the estimated land value per acre.
$3,121
$3,272
Correct! $2,311 Solution: (780 - 508)/.1190 = 2,310.92
$2,423
None of the above
Question 3 16..7 pts
Land has specified legal description, with ownership recorded by local governments for taxation
and other controls.
True
Correct! False
Question 4 16..7 pts
,Land Lis La Ldurable, Limmobile Lresource. LWith Lproper Lmaintenance, Lland's Lbasic Lproperties Ldo
Lnot Lchange Lover Ltime, Lor Lif Lthey Ldo Lchange, Lthey Lchange Lso Lslowly Lthat Lland Lis Lconsidered Lto
Lhave Lan Linfinite Llife.
Correct! LTrue
LFalse
Question L5
Suppose La Lfarmer Lis Lconsidering Lthe Lpurchase Lof Ladditional Lfarmland. LIt Lis Lbelieved Lthat Lthe
operating Lrevenue Lper Lacre Lof Lland Lper Lyear Lwill Lbe L$760 Land Loperating Lexpenses Lwill Lbe
L$514 Lin Lpresent Ldollars. LThe Linflation Lrate Lis Lexpected Lto Lbe L8% LAssume Lthat Lthe Lmarginal
Ltax Lrate Lis L16% Land Lthat Lthis Lfarmer Lrequires Lat Lleast Lan L8% Lpre-tax, Lrisk Lfree Lreturn Lon
Lcapital.
(i) Calculate Lthe Lnominal Lbefore-tax Lnet Lreturns Lat Lthe Lend Lof
Lyear L1. La.
$308.19
b.
$265.68
c.
$246.00
d.
$244.43
e. LNone Lof Lthe Lanswers Lare
Lcorrect LEnter LResponse LHere:
(ii) Calculate Lthe Lnominal Lafter-tax Lnet Lreturns Lat Lthe Lend Lof
Lyear L2. La.
$279.59
, b.
$221.74
c.
$241.02
d.
$223.17
e. LNone Lof Lthe Lanswers Lare
Lcorrect LEnter LResponse LHere:
(iii) Calculate Lthe Lnominal Lafter-tax Lnet Lreturns Lat Lthe Lend Lof
Lyear L3. La.
$241.02
b.
$260.31
c.
$239.48
d.
$301.96
e. LNone Lof Lthe Lanswers Lare
Lcorrect LEnter LResponse LHere:
Answer L1:Correct!b
LAnswer
L2:Correct!c LAnswe
Question L110 L/ L10 Lpts
CORRECT ANSWES 2025/2026
Question 1 16..7 pts
Land's basic properties over time.
changes
Correct! remains constant
none of the above
Question 2 16..7 pts
Joan wants to buy land to expand her farm. She estimates one property would generate $780
per acre in crop sales while costing $505 per acre in operating costs. If the real expected rate of
return is 11.90%, calculate the estimated land value per acre.
$3,121
$3,272
Correct! $2,311 Solution: (780 - 508)/.1190 = 2,310.92
$2,423
None of the above
Question 3 16..7 pts
Land has specified legal description, with ownership recorded by local governments for taxation
and other controls.
True
Correct! False
Question 4 16..7 pts
,Land Lis La Ldurable, Limmobile Lresource. LWith Lproper Lmaintenance, Lland's Lbasic Lproperties Ldo
Lnot Lchange Lover Ltime, Lor Lif Lthey Ldo Lchange, Lthey Lchange Lso Lslowly Lthat Lland Lis Lconsidered Lto
Lhave Lan Linfinite Llife.
Correct! LTrue
LFalse
Question L5
Suppose La Lfarmer Lis Lconsidering Lthe Lpurchase Lof Ladditional Lfarmland. LIt Lis Lbelieved Lthat Lthe
operating Lrevenue Lper Lacre Lof Lland Lper Lyear Lwill Lbe L$760 Land Loperating Lexpenses Lwill Lbe
L$514 Lin Lpresent Ldollars. LThe Linflation Lrate Lis Lexpected Lto Lbe L8% LAssume Lthat Lthe Lmarginal
Ltax Lrate Lis L16% Land Lthat Lthis Lfarmer Lrequires Lat Lleast Lan L8% Lpre-tax, Lrisk Lfree Lreturn Lon
Lcapital.
(i) Calculate Lthe Lnominal Lbefore-tax Lnet Lreturns Lat Lthe Lend Lof
Lyear L1. La.
$308.19
b.
$265.68
c.
$246.00
d.
$244.43
e. LNone Lof Lthe Lanswers Lare
Lcorrect LEnter LResponse LHere:
(ii) Calculate Lthe Lnominal Lafter-tax Lnet Lreturns Lat Lthe Lend Lof
Lyear L2. La.
$279.59
, b.
$221.74
c.
$241.02
d.
$223.17
e. LNone Lof Lthe Lanswers Lare
Lcorrect LEnter LResponse LHere:
(iii) Calculate Lthe Lnominal Lafter-tax Lnet Lreturns Lat Lthe Lend Lof
Lyear L3. La.
$241.02
b.
$260.31
c.
$239.48
d.
$301.96
e. LNone Lof Lthe Lanswers Lare
Lcorrect LEnter LResponse LHere:
Answer L1:Correct!b
LAnswer
L2:Correct!c LAnswe
Question L110 L/ L10 Lpts
