FBM 2024 MC

Which of the following would NOT be considered a fixed cost of owning a piece of farm equipment?

• taxes

• insurance

• shelter

• fuel

The value of an asset at the end of its useful life is:

• actual value

• salvage value

• absolute value

• appraised value

Assets that are consumable or will be used up within one year are called

• neat-term assets

• current assets

• market assets

• revolving assets

A liability is a(n):

• obligation or debt owed to someone

• asset that will pay for itself

• business asset

• money someone owes you

Fighting Tiger Farms raises 2 million broilers annually. In addition, it owns a feed mill which provides feed for the birds, owns the processing facility, and markets the dressed birds to retail grocery stores. This type of business is known as:

• horizontal integration

• marketing cooperative

• vertical integration

• supply cooperation

An agreement between a producer and a landowner where the producer gives the landowner a portion of the crop produced in payment for the land is called a:

• cash rental arrangement

• cash sale

• share rental arrangement

• amortization

A line of credit loan to purchase farm inputs, like fertilizer, is called a(n):

• consumer loan

• long-term loan

• mortgage

• operating loan

To account for the time value of money, which of the following should be the deciding factor when choosing between different investment opportunities?

• the one with the lowest cost

• the one with the highest net present value

• the one with the highest average profits over the lifetime of the investment

• the one with the highest revenue over the lifetime of the investment

The demand for food is usually considered inelastic. This means that if price changes by 10 percent,

• the percentage change in quantity demanded will be less than 10 percent

• the percentage change in quantity demanded will be more than 10 percent

• the percentage change in demanded will be equal to 10 percent

• there is no change in quantity demanded

Someone who is bullish on market prices thinks that prices will:

• stay steady

• go lower

• go higher

• none of the above