WorksheetsFarm Business Management Multiple Choice Questions 1-40
Total questions: 39
Worksheet time: 20mins
Which of the following would not be considered a purpose for using systematic decision making?
Better organize the thought process
Achieve outcomes closely related to the goals
Change your goals as often as possible
Make timely decisions
Which of the following types of goals can be achieved in one to ten years?
Short term goals
Intermediate goals
Long term goals
None of the above
Which of the following would not be included as a guideline for setting goals?
Goals should be written
Goals should be realistic
Goals should have target dates
Goals should be competitive
Which of the following is an example of physical record keeping?
Tracking calving percentages
Keeping receipts for gas purchases
Paying off debt by selling old equipment
Shopping for the cheapest feed for your livestock
Which of the following would be found on a net worth statement (balance sheet) and consists of items owned by the person or business?
Assets
Liabilities
Income
Expenses
Interest and depreciation would be examples of which of these?
Assets
Liabilities
Income
Expenses
Which of the following measures how effective the business is in generating revenue from production?
Liquidity
Solvency
Profitability
Financial Efficiency
Which measure of liquidity is defined as the current assets divided by the current liabilities?
Current Ratio
Working Capital
Debt Structure
Asset Structure
What does EBITDA stand for?
Estimated Business Income To Determine Acceptability
Earnings Before Interest, Taxes, Depreciation, and Amortization
Expenses Budgeted In Total Debt and Assets
Expected Balance of Investment, Turnover, Depreciation, and Amortization
Which of the following measures of financial efficiency reflects the percentage of total revenue devoted to expenses incurred in the normal production cycle?
Asset turnover ratio (ATR)
Operating expense ratio (OER)
Depreciation expense ratio (DER)
Interest Expense Ratio (IER)
Which of the following is NOT one of the four factors of production?
Quality
Land
Labor
Management
Which of the following refers to expenses that do not change with the level of production?
Income
Operating expenses
Fixed expenses
Net returns
Which of the following is necessary to calculate break-even price?
Yield
Operating expense
Fixed expense
All of the above
A comparison of projected costs and returns associated with some change in the operation of the business would be?
Enterprise Budget
Partial Budget
Cash Flow Budget
Total Farm Budget
Which of the following would not be included on a projected cash flow?
Cash sales
Inventory values
Loans
Tax payments
The analysis of the relationship between inputs and outputs is called what?
Production function
Profit maximization
Diminishing returns
Opportunity cost
Which of the following best defines the concept of opportunity cost?
Costs that do not change regardless of the level of production or even shut down.
The cost of using a resource in one way based on the return that could be obtained from using it in the best alternative.
The point where the marginal product equals the price of the added input.
Expenses for licenses or contracts that allow a producer to engage in production
In which stage of the production function will you maximize profit?
Stage 1
Stage 2
Stage 3
Stage 4
Which type of utility can be referred to as “convenience” ensuring that the product is in a location that consumers can easily acquire it?
Form
Time
Place
Possession
Which of the following make up the steps in the marketing process?
Processing, packaging, wholesaling, advertising, retailing
Producing, packaging, advertising, retailing, consuming
Producing, processing, wholesaling, retailing, consuming
Processing, packaging, wholesaling, advertising, consuming
Which of the following statements is true about demand?
Demand is fixed, and consumers are going to purchase regardless of price
Consumption is based primarily on the cost of production
Farm support programs are the federal government's way of controlling demand
A rational consumer will take more of a produce as prices decrease
Interest that is paid one time and is calculated by multiplying the principle by the interest rate, without consideration of time or payment periods is referred to as which of the following?
Amortization
Discounting
Simple interest
Compounding
Calculating the future value of an annuity would be done using what method?
Amortization
Discounting
Simple interest
Compounding
Which of the following is used to determine the discount rate of an investment
Internal rate of return
Payback period analysis
Net present value
Future value
What are the three factors of depreciation?
Income, expenses, and taxes
Basis, service date, method
Records, accounting method, and inventory
Asset, value, and life expectancy
Which of the following would be considered a strategy to reduce taxable income?
Postpone expenditures until after the beginning of the next year.
Sell as much as possible before the end of the year.
Buy needed machinery, equipment and other supplies before the end of the year
Work a second job.
Which of the following business organizations distributes earnings to shareholders, which are then taxed as personal income?
Sole Proprietorship
Partnership
Corporation
S Corporation
Which of the following business organizations is the easiest to transfer ownership upon the death of an owner?
Sole Proprietorship
Partnership
Corporation
Limited Liability Company
What is the primary difference in a limited partnership from other forms of business?
Owners are called members
Limited partners cannot participate in management decisions
There is only one owner
The partnership is restricted to a specific time frame, and automatically dissolves upon completion of the intended purpose
Which form of cooperative helps its members by providing inputs at cheaper prices through buying in bulk?
Purchasing
Marketing
Credit
Processing
Which element of a contract provides evidence that all parties intend to fulfill their obligations under the agreement?
Two or more legal parties
Offer and acceptance
Sufficient consideration
Not unlawful or immoral
In the event of a breach of contract, the wronged party may do which of the following?
Keep whatever amount of assets are in their possession so long as it equates to the amount of damage caused by the breach of contract.
Request the court to require specific performance of the contract.
Determine a new contractual agreement and enforce it upon the other party.
All of the above
The doctrine of attractive nuisance specifically refers to what class of individuals?
Employees
Trespassers
Elderly
Children
Which type of risk could also be referred to as price risk?
Market Risk
Production Risk
Financial Risk
Legal Risk
The risk management process is 5 steps arranged in a continuous cycle. What is the primary benefit of the process being arranged in this manner?
Every possible threat will be considered.
There are less costs associated with planning.
The risk management plans will be consistently reviewed and adjusted.
You can start at any point in the process.
Which of the following is a tool used to reduce risk of various types?
Lawsuits
Taxes
Insurance
Depreciation
A farmer who is a riparian has certain rights and responsibilities they should observe. A riparian is someone who owns land bordering what?
State lines
Power plants
Woods or forests
Streams or rivers
Which of the following refers to the concept of different entities specializing in what they do best and trading so that more is produced as a whole?
Absolute advantage
Comparative advantage
Fear of shortages
Protectionism
In reference to international trade, what does GATT stand for?
General Agreement on Tariffs and Trade
General Accounting of Taxes and Trade
Government Agreement on Travel and Taxes
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