9. Brown's net worth is: a. $303,500 b, $299,500 c. $316,500 d. $296,500 e. $554,500 10. Brown owns eurrent assets of a. $556,500 b. $400,000 c. $3,000 d. $500 e. $56,500 11. Brown owes current liabilities of: a. $253,000 b. $225,000 c. $6,000 d. $16,000 e. $9,000 12. The maxi-min strategy for choosing among risky alternatives assumes that the farm manager is most concerned with: a. achieving a high average return b. achieving the best possible result in a good year c. achieving the best possible result in a bad year d. minimizing the chances of suffering a loss 13. Harry Highgate had a net farm income last year of $40,000. Opportunity costs for unpaid family labor and management were $30,000. Equity in the business was $200,000. What was the percent return on his equity? a. 10% b. 2090 c. 5% d. 15% e. 3% 14. A farmer has total assets of s500,000 which includes a market value of $300,000 on land and a debt to equity ratio is 1.0. His lender values the land at book value which is 10% less than market value, what is the farmer's debt to equity ratio at book value? a. 0.88:1 20. How should you value home-grown feeds such as com or hay in ivestock enterprise budget? feeding a. Cash invested in growing crops. b. Variable production costs of the homegrown c. Net selling price of the homegrown feeds. d. Zero-they have no value feeds. 21. The main goal of income tax management is to: a. Minimize before-tax income. b. Minimize total taxes paid. c. Maximize taxes paicd. d. Maximize taxable income. e. Maximize after-tax income. 22. For which of the following sets of unemployment and inflation rates will the Federal Reserve Board be the most reluctant to increase interest rates? a.10% b. 10% . 1096 d.5% 2% 5% 10% 5% 23. Which of the following items will not appear on either the Jan. 1, 2012 or Jan. 1, 2013 balance sheets? a. A mortgage owed and not yet repaid in 2012. b. Money borrowed during 2012 and not yet repaid. c. Feeder pigs purchased, fed, and then sold during 2012. d. Tractor sold during 2012. e. Grain harvested in 2012 and put in storage. 24. A soybean producer decides to store soybeans in the local elevator for five months. The price at harvest is $6.00 per bushel and the elevator charges $0.02 per bushel per month for storage plus a one-time $0.05 per bushel handling charge. The producer has 4,000 bushels to store and must borrow $24,000 at 8% annual interest in order to store the soybeans. What price must be received for the soybeans to break even and cover storage and opportunity costs? a. $6.15 b. $6.20 c. $6.25 d. $6.35 e. None of the above. 25. A farmer has debt to equity ratio of 2:1. The current liabilities are $50,000 and the non-current (intermediate and long-term) liabilities are $70,000. What is the value of the assets? a. $240,000 b. $120,000 c. $ 60,000 d. $180,000 e. Cannot be determined with information provided. 26. On April 1, Karen Constalk borrowed $8,000 to buy supplies to plant her corn. On November 1, she repaid the $8,000 along with $495 interest. What annual interest rate did she pay on the loan'? a. 6.1 87% b. 9.281% . 10.607% d. 12.375% e. 16.16% 27. Tom Farmer earned $20,000 from farming last year after paying all costs including the value of his labor and management. His total assets are valued at $380,000. He has outstanding mortgages, loans, and other debts of $125,000. What rate of return did he a. 5.26% b. 5.55% c. 7.84% d. 10.50% e. 16.0% 28. Dryland corn in eastern Nebraska has an expected yield of 90 bushels per acre and has a production cost of $140.00 per acre. Expected market prices are $2.50 per bushel for corn and $6.00 per bushel for soybeans. Soybeans can be raised with a production cost of $120.00 per acre. At what yield per acre would soybeans generate the same net return per acre as corn? a. 25.6 bushels b. 29.1 bushels c. 34.2 bushels d. 38.7 bushels e. 47.6 bushels 29. A farmer is considering purchasing a combine, Annual combine ownership costs will be 20% of the purchase price. The annual operating costs will be S9 000 per year. machine will increase income by $3,000 per year due to through better timeliness and save $10,000 in custom combining costs. maxim The increased harvested yields What is the um the farmer can pay for the combine and increase annual profit? a. $5,999 b. $49,999 c. $109,999 d. $10,999 e. $19,999 30. Most farmers are more likely to accept a risk if a. Only a small possible loss is involved b. They have a high debt-to-asset ratio c. They have high fixed cash flow obligations d. They are primarily concened with maintaining their net worth 31. On November 1 the local corn price is $6.75 and Carl Corngrower is deciding whether to sell his crop now or store it to try and get a better price. Storage costs and opportunity cost for storage are 4 cents per bushel per month. What price would the local elevator need to be paying on January 15 to break even storing the corn? a. $6.75 b. $6.79 c. $6.81 d. $6.85 e. $6.87 32. You have 200 pigs to market at 250 Ibs. each. Overhead (fixed) costs total $15,000. Feed costs are $10 per pig and other costs are $2 per pig. What price per pound is needed to breakeven? a. $0.435 b.$0.30 c. $0.248 d. $0.348 e. None of the above. 33. True or False: Average Fixed Cost is constant as output increases. hou precation expense for a new tractor is $15,000 per year. You use the tractor 500 hours f enterprise if hours of use determine the allocation? in the first year: 350 are used in your corn enterprise, 100 for soybeans, and 50 or hay. How much of the depreciation expense should be allocated to the hay a. $15,000 b. $10,500 c. $4,500 d. $3,000 e. $1,500 35. Joe's farm has $50,000 current assets, $150,000 liabilities, and $50,000 long term liabilities. Joe's debt to equity ratio is: long term assets, $30,000 current a. 0.33 b. 0.5 c. 0.67 d. 0.75 e. 1.50 36. True or False: The Federal Reserve sets exchange rates between the US dollar and other major currencies. 37. Which of the following best describes a balance sheet? a. shows changes in assets and liabilities over the accounting period b. shows changes in income over a period of time c. shows profit for the last accounting period d. shows asset and liability values at a point in time 38. Which of the following is not true about partial budgets? a. They help analyze how changes in certain farm enterprises affect profits. b. They measure every return and cost change, whether increased, decreased, or stay the same. c. They show the effect that various prices, yields, and costs have on net farm income if proposed change is made. d. They help analyze loan repayment capacity of a farm business. e. They are usually simpler than complete farm budgets. 9. Brown's net worth is: a. $303,500 b, $299,500 c. $316,500 d. $296,500 e. $554,500 10. Brown owns eurrent assets of a. $556,500 b. $400,000 c. $3,000 d. $500 e. $56,500 11. Brown owes current liabilities of: a. $253,000 b. $225,000 c. $6,000 d. $16,000 e. $9,000 12. The maxi-min strategy for choosing among risky alternatives assumes that the farm manager is most concerned with: a. achieving a high average return b. achieving the best possible result in a good year c. achieving the best possible result in a bad year d. minimizing the chances of suffering a loss 13. Harry Highgate had a net farm income last year of $40,000. Opportunity costs for unpaid family labor and management were $30,000. Equity in the business was $200,000. What was the percent return on his equity? a. 10% b. 2090 c. 5% d. 15% e. 3% 14. A farmer has total assets of s500,000 which includes a market value of $300,000 on land and a debt to equity ratio is 1.0. His lender values the land at book value which is 10% less than market value, what is the farmer's debt to equity ratio at book value? a. 0.88:1 20. How should you value home-grown feeds such as com or hay in ivestock enterprise budget? feeding a. Cash invested in growing crops. b. Variable production costs of the homegrown c. Net selling price of the homegrown feeds. d. Zero-they have no value feeds. 21. The main goal of income tax management is to: a. Minimize before-tax income. b. Minimize total taxes paid. c. Maximize taxes paicd. d. Maximize taxable income. e. Maximize after-tax income. 22. For which of the following sets of unemployment and inflation rates will the Federal Reserve Board be the most reluctant to increase interest rates? a.10% b. 10% . 1096 d.5% 2% 5% 10% 5% 23. Which of the following items will not appear on either the Jan. 1, 2012 or Jan. 1, 2013 balance sheets? a. A mortgage owed and not yet repaid in 2012. b. Money borrowed during 2012 and not yet repaid. c. Feeder pigs purchased, fed, and then sold during 2012. d. Tractor sold during 2012. e. Grain harvested in 2012 and put in storage. 24. A soybean producer decides to store soybeans in the local elevator for five months. The price at harvest is $6.00 per bushel and the elevator charges $0.02 per bushel per month for storage plus a one-time $0.05 per bushel handling charge. The producer has 4,000 bushels to store and must borrow $24,000 at 8% annual interest in order to store the soybeans. What price must be received for the soybeans to break even and cover storage and opportunity costs? a. $6.15 b. $6.20 c. $6.25 d. $6.35 e. None of the above. 25. A farmer has debt to equity ratio of 2:1. The current liabilities are $50,000 and the non-current (intermediate and long-term) liabilities are $70,000. What is the value of the assets? a. $240,000 b. $120,000 c. $ 60,000 d. $180,000 e. Cannot be determined with information provided. 26. On April 1, Karen Constalk borrowed $8,000 to buy supplies to plant her corn. On November 1, she repaid the $8,000 along with $495 interest. What annual interest rate did she pay on the loan'? a. 6.1 87% b. 9.281% . 10.607% d. 12.375% e. 16.16% 27. Tom Farmer earned $20,000 from farming last year after paying all costs including the value of his labor and management. His total assets are valued at $380,000. He has outstanding mortgages, loans, and other debts of $125,000. What rate of return did he a. 5.26% b. 5.55% c. 7.84% d. 10.50% e. 16.0% 28. Dryland corn in eastern Nebraska has an expected yield of 90 bushels per acre and has a production cost of $140.00 per acre. Expected market prices are $2.50 per bushel for corn and $6.00 per bushel for soybeans. Soybeans can be raised with a production cost of $120.00 per acre. At what yield per acre would soybeans generate the same net return per acre as corn? a. 25.6 bushels b. 29.1 bushels c. 34.2 bushels d. 38.7 bushels e. 47.6 bushels 29. A farmer is considering purchasing a combine, Annual combine ownership costs will be 20% of the purchase price. The annual operating costs will be S9 000 per year. machine will increase income by $3,000 per year due to through better timeliness and save $10,000 in custom combining costs. maxim The increased harvested yields What is the um the farmer can pay for the combine and increase annual profit? a. $5,999 b. $49,999 c. $109,999 d. $10,999 e. $19,999 30. Most farmers are more likely to accept a risk if a. Only a small possible loss is involved b. They have a high debt-to-asset ratio c. They have high fixed cash flow obligations d. They are primarily concened with maintaining their net worth 31. On November 1 the local corn price is $6.75 and Carl Corngrower is deciding whether to sell his crop now or store it to try and get a better price. Storage costs and opportunity cost for storage are 4 cents per bushel per month. What price would the local elevator need to be paying on January 15 to break even storing the corn? a. $6.75 b. $6.79 c. $6.81 d. $6.85 e. $6.87 32. You have 200 pigs to market at 250 Ibs. each. Overhead (fixed) costs total $15,000. Feed costs are $10 per pig and other costs are $2 per pig. What price per pound is needed to breakeven? a. $0.435 b.$0.30 c. $0.248 d. $0.348 e. None of the above. 33. True or False: Average Fixed Cost is constant as output increases. hou precation expense for a new tractor is $15,000 per year. You use the tractor 500 hours f enterprise if hours of use determine the allocation? in the first year: 350 are used in your corn enterprise, 100 for soybeans, and 50 or hay. How much of the depreciation expense should be allocated to the hay a. $15,000 b. $10,500 c. $4,500 d. $3,000 e. $1,500 35. Joe's farm has $50,000 current assets, $150,000 liabilities, and $50,000 long term liabilities. Joe's debt to equity ratio is: long term assets, $30,000 current a. 0.33 b. 0.5 c. 0.67 d. 0.75 e. 1.50 36. True or False: The Federal Reserve sets exchange rates between the US dollar and other major currencies. 37. Which of the following best describes a balance sheet? a. shows changes in assets and liabilities over the accounting period b. shows changes in income over a period of time c. shows profit for the last accounting period d. shows asset and liability values at a point in time 38. Which of the following is not true about partial budgets? a. They help analyze how changes in certain farm enterprises affect profits. b. They measure every return and cost change, whether increased, decreased, or stay the same. c. They show the effect that various prices, yields, and costs have on net farm income if proposed change is made. d. They help analyze loan repayment capacity of a farm business. e. They are usually simpler than complete farm budgets