AREC 305 ACTUAL FINAL EXAM UPDATED

AREC 305 (ACTUAL / ) FINAL EXAM UPDATED

QUESTIONS AND 100% VERIFIED ANSWERS GRADED A+

a whole-farm budget contains : - ---answers----estimated

costs, returns, and resource needs for a specific set of enterprises

the first step in whole-farm planning is to prepare the whole farm budget - ---answers----false

"technical coefficients" for whole-farm planning refer to : - ---

answers----the quantities of resources needed to produce one unit of each enterprise being considered

if a resource in a linear programming formulation is not used up entirely by the selected activities, then the shadow price on the resource constraint will be zero - ---answers----true

in linear programming to maximize farm profits, "shadow

price" tells you : - ---answers----the amount profit would

increase if the operator had one more unit of a limited resource

if the shadow price on a labor constraint in linear programming is $40.00 (per hour) and labor can be hired for $10 per hour, profits would be increased by hiring more labor - ---answers----true 1 / 3

any investment that has a positive net present value will also be financially feasible - ---answers----false

the process of finding the future value of a present sum is

called : - ---answers----compounding

depreciation is not included when computing the net cash flows from an investment - ---answers----true

the process of finding of finding the present value of a future

sum is called : - ---answers----discounting

a $1,000 of income 5 years from now is worth the same as $1,000 of income today - ---answers----false

a series of periodic payments is called a (n) : - ---answers---

-annuity

the most accurate way to analyze the profitability of an investment is to compute the payback period - ---answers--- -false

using a higher discount rate will cause the present value of a

future amount to : - ---answers----decrease

• / 3

income taxes can affect the profitability of an investment - --- answers----true

a net present value of zero means the investment has an

internal rate of return : - ---answers----exactly equal to the

discount rate

the simple rate of return and the internal rate of return will be the same for any investment - ---answers----false

the internal rate of return is the interest rate that would : - ---

answers----make net present value just equal to zero

the higher the interest rate the smaller the annual payment needed to accumulate a given amount 10 years from now - --- answers----true

the future value of $10,000 placed in a savings account will

depend on : - ---answers----both the interest rate and the

time it is left in the account

a person requiring only a 6 percent return could pay more for an investment than someone requiring an 8 percent return - - --answers----true

a financial feasibility analysis looks at the : - ---answers----

net cash flows resulting from the investment and its financing

• / 3