2021-2022 Regional FBM Exam

Calculate the first year payment plan on a constant principal/decreasing payment loan for $240,000 over 20 years at 9% interest.

• $12,450

• $22,350

• $33,600

• $36,200

Workman's compensation law

• Guarantees agricultural workers over 16 a minimum wage

• Provides payment by an employer to an employee injured on the job

• Allows farm workers to pay income tax on only 50% of wages over a minimum level

• Stipulates certain fringe benefits to be paid to full-time agricultural workers

You have secured a loan and now you have the money to buy one complete section of Minnesota farm land, how many acres are you actually buying?

• 360 acres

• 640 acres

• 960 acres

• 1280 acres

An enterprise budget is:

• A physical and financial plan for the entire farm business for a specific period of time.

• A statement of projected costs and returns associated with one production process, usually for one production period.

• The tools used in analyzing only changes in the farm operations and the potential change in net income.

• Record of past production performance.

A demand curve shows:

• The quantities people will buy at various possibles prices

• The prices people will pay for various possible quantities

• The quantities people would like to buy at various possible prices

• A and B

Which type of business would distribute patronage refunds?

• Individual proprietorship

• Cooperative

• Limited partnership

• Corporation

A farmer rents and adjacent 160 acres of cropland for $200 per acre to operate with the current 800 acres and existing equipment. The effect on the farmer's cost will be:

• To increase fixed cost per acre

• To decrease fixed cost per acre

• To increase variable cost per acre

• To decrease variable cost per acre

A farmer has total assets of $500,000 which includes a market value of $300,000 on land. The farmers asset to equity ratio is 1.0 : 1. The lender values the land at book value which is 20% less than market value. What is the farmers debt to asset ratio at book value?

• 0.88 : 1

• 1.12 : 1

• 1.14 : 1

• 1.27 : 1

A farmer who wants the right to but not the obligation to sell a particular commodity at a specific price level would use a:

• Basis contract

• Put option

• Call option

• Cash forward contract

The Federal Insurance Contribution Act (FICA) tax is also called:

• Medicare

• Medicaid

• Social Security

• Internal Revenue