AGBM 407 EXAM 1 QUESTIONS AND CORRECT ANSWERS

AGBM 407 EXAM 1 QUESTIONS AND
CORRECT ANSWERS
ManagersA2mustA2successfullyA2integrate...A2-A2Ans--
technical,A2financial,A2physical,A2andA2humanA2assets

InA2orderA2toA2getA2theA2rightA2profitA2managersA2mustA2integrateA2assets...A2-A2Ans--
faster,A2cheaper,A2andA2quickerA2thanA2competitors

theA2threeA2E'sA2forA2managers...A2-A2Ans--
efficiencyA2+A2effectivenessA2+A2economicA2well-being

onlyA2applyA2theA2technicalA2skillsA2toA2thingsA2-A2Ans--managers

motivateA2resourcesA2toA2getA2resultsA2greaterA2thanA2theA2sumA2ofA2theA2partA2-A2Ans--
leaders

anyA2farmA2whereA2theA2majorityA2ofA2theA2businessA2isA2ownedA2byA2theA2operatorA2andA2
individualA2relatedA2toA2theA2operatorA2-A2Ans--familyA2farm

anyA2farmA2whereA2theA2operatorA2andA2personalA2relatedA2toA2theA2operatorA2doA2notA2o
wnA2aA2majorityA2ofA2theA2businessA2-A2Ans--nonfamilyA2farms

mostA2USA2farmsA2are...A2-A2Ans--small

anA2individualA2cropA2orA2typeA2ofA2livestockA2-A2Ans--enterprise

allowsA2usA2toA2lookA2atA2profitabilityA2throughA2flexibleA2resourcesA2-A2Ans--
enterpriseA2analysis

whatA2remainsA2afterA2coveringA2allA2expenses,A2includingA2opportunityA2costsA2-A2Ans--
profitA2(orA2loss)

aA2projectedA2economicA2profitA2ofA2zeroA2meansA2thatA2-A2Ans--
labor,A2land,A2andA2capitalA2earningA2exactlyA2theirA2opportunityA2costs

allA2cashA2andA2noncashA2"income"A2fromA2theA2productionA2-A2Ans--revenue

costA2ofA2production=A2-A2Ans--totalA2cost/expectedA2yield

allA2costsA2thatA2wouldA2beA2incurredA2onlyA2ifA2theA2cropA2isA2producedA2-A2Ans--
variableA2orA2operatingA2expenses

, costsA2thatA2mustA2beA2paidA2evenA2ifA2noA2cropA2isA2producedA2-A2Ans--
fixedA2orA2ownershipA2expenses

representsA2aA2returnA2toA2allA2resourcesA2thatA2wereA2notA2chargedA2inA2theA2budgetA2(us
uallyA2management)A2-A2Ans--profit

shouldA2beA2usedA2withA2cautionA2asA2theyA2mayA2notA2reflectA2conditionA2onA2aA2particula
rA2farmA2-A2Ans--third-partyA2budgets

NASSA2-A2Ans--NationalA2Ag.A2statisticA2services

anA2economicA2enterpriseA2budgetA2includesA2informationA2onA2opportunityA2costsA2of...A2
-A2Ans--labor,A2capital,A2land,A2andA2perhapsA2management

break-evenA2yield=A2-A2Ans--totalA2cost/expectedA2sellingA2price

break-evenA2price=A2-A2Ans--totalA2costs/expectedA2yield

returnsA2aboveA2variableA2costsA2-A2Ans--grossA2margin

AnA2outlineA2orA2summaryA2ofA2theA2typeA2andA2volumeA2ofA2productionA2toA2beA2carriedA2
outA2theA2entireA2farmA2andA2theA2resourcesA2neededA2toA2doA2it.A2-A2Ans--whole-
farmA2plan

objectiveA2ofA2whole-farmA2budgesA2isA2to...A2-A2Ans--
chooseA2combinationA2ofA2enterprisesA2thatA2willA2maximizeA2totalA2grossA2margin

afterA2settingA2overallA2objective,A2managersA2should...A2-A2Ans--setA2performanceA2goals

analyzingA2howA2changesA2inA2keyA2assumptionA2affectA2incomeA2andA2costA2projectionsA
2-A2Ans--sensitivityA2analysis


analyzingA2theA2abilityA2ofA2theA2businessA2toA2meetA2cashA2flowA2obligationsA2-A2Ans--
liquidityA2analysis

summarizesA2valueA2ofA2firm'sA2assetsA2andA2liabilitiesA2atA2aA2momentA2inA2timeA2-A2Ans--
balanceA2sheet

purposeA2andA2useA2ofA2balanceA2sheet...A2-A2Ans--
SystematicA2organizationA2ofA2everythingA2"owned"A2andA2"owed"

assets=A2-A2Ans--totalA2liabilitiesA2+A2totalA2ownerA2equity

OwnerA2equity=A2-A2Ans--AssetsA2-A2Liabilities