FINAL AGEC 5100
A cross-price elasticity of 1.0 indicates two goods can be classified as independent.
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A prepaid expense would be classified as a liability on the balance sheet.
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A restriction that could be placed on a loan is that a firm be required to maintain certain ratios at predetermined levels throughout the time the loan is outstanding is called a promissory requirement.
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A shortage occurs when a firm charges a price that is too high.
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Accounting methods for noncurrent assets, such as machinery, are standardized across the world to facilitate trade.
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Accounts receivable loans with notification means the agribusiness will collect the money that is owed.
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Accumulated depreciation on equipment is reported as a liability on the balance sheet.
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An implicit cost involves payments to suppliers of resources.
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Bad debt expense would be an example of a fixed cost.
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Equity capital can be secured by borrowing from a commercial bank.
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Evaluating the strengths and weaknesses of your competition is not a fundamental part of a strategic marketing plan.
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If total assets equal $600,000 and total liabilities equal $400,000, then owner's equity equals $1,000,000.
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In 2006, about 83 percent of all US business annual receipts came from proprietorships.
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In 2013, for every dollar spent on food, 83 cents went to the farmer.
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In 2014, Kroger was the largest US food retailer.
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In a lease agreement, the owner of the asset is referred to as the lessee.
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In a limited partnership, each individual partner, regardless of the percentage of capital contributed, has equal rights and liabilities, unless stated otherwise in a partnership agreement.
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In the profitability analysis model ROS is multiplied by asset turnover to calculate ROE.
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Interest expense is subtracted from net income before interest when calculating the return on assets ratio.
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Interest on debt that is projected for the upcoming year would be recorded as a current liability on the income statement.
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It has been said that usually about 70 percent of a message is verbal.
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Leadership only involves providing instructions on how to complete a task and information on the desired results.
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Many methods of analyzing a firm's marketing strategy involve "gut feel" and not a great deal of quantitative analysis.
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Non-family farms produce the largest share of farm products at 45.3 percent.
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Often the toughest part of decision-making is evaluation.
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Organizations that focus primarily on communicating the benefits of their products are called market-driven.
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Organizing is defined as guiding the efforts of others toward achieving a common goal.
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Positioning is what you do to the product.
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Sales forecasting involves estimating sales in only physical units as accurately as possible for a specific period of time.
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Sanitary and phytosanitary regulations are intended to protect human, animal, or plant life or health.
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The "statement of cash flows" does exist in all countries.
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The goal many lenders have for the current ratio is 1.0.
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The goal many lenders have for the debt-to-asset ratio is for it to be greater than 0.5.
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The greatest advantage of the corporate form of organization is taxation and regulation.
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The last set of marketing activities and decisions in a strategic marketing plan is to choose a position.
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The last step in the planning process is to develop a means of implementing the plan.
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The last step when conducting a marketing audit is to reevaluate the plan
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The manner in which jobs are broken into components and then are assigned to members or groups is called the chain of command.
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The number one source of borrowed funds for most agribusinesses is commercial banks.
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The share of total US employment that is provided by food and agricultural industries is 6.5 percent.
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The statement of owner's equity would include dividends paid to shareholders for a proprietorship.
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The value of relationships in a culture is most easily viewed by the importance of the business associations of the firm.
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To do nothing is always a default decision
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Today, there is a growing interest in local foods. It is estimated that almost $4 billion was spent on local foods in 2012.
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When conducting a SWOT analysis to develop a strategic marketing plan, you focus only on your firm and product—not on your competitors.
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When conducting a marketing audit, an agrimarketer focuses only on the areas where performance was poor.
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When dealing in the area of international business, you should always expect foreign clients to be on time for appointments.
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When evaluating the days in accounts receivable ratio, the result should at greater than the days in accounts payable ratio.
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A budget is typically a specific forecast of financial performance and can be used to project cash inflows and outflows.
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A corporation is a special legal entity endowed by law with the powers, rights, liabilities, and duties of a person.
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A disadvantage of licensing is that a licensor could find its brand image hurt if the licensee has not maintained sufficient control over the product quality or promotion.
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A factor that is opening the doors of world markets for smaller businesses is technology.
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A partnership pays no income tax as a separate business entity.
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A relatively new type of business organization that closely resembles a partnership, but provides its members limited liability is a limited liability company.
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An amortized loan means the amount of a loan is reduced by periodic loan payments of decreasing interest and increasing principal payments until the loan is repaid.
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An example of derived demand is demand for fertilizer.
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Another name for an income statement is a P and L statement.
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Benchmarking can be used to assess internal strengths and weaknesses.
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Each state has what are called "blue-sky laws," which regulate the way in which corporation stock may be sold and which protect the rights of investors.
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Economics is defined as the study of how scarce resources are combined to meet the needs of people in a society of unlimited wants.
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Food processing and manufacturing involves turning raw agricultural commodities either into ingredients for further processing or final consumer products.
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Forecasting change is a key element of good planning.
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If a mortgage equals $100,000 and the first principal payment of $10,000 is due to be paid 18 months after the loan is made, the amount recorded as a current liability on the balance sheet prepared at the loan origination would be $0.
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If demand is price elastic, total revenue increases when price decreases.
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In 2006, single proprietorships accounted for 4 percent of total US business receipts.
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In the event of the liquidation of a corporation, owners of preferred stock would be repaid before owners of common stock.
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In the year 2010, the non-Latin whites in California, Texas, New Mexico, and Hawaii were not the majority of the state population for each of those states.
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In-depth personal interviews often average $100 or more per completed interview, before paying compensation to the person being interviewed.
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Leadership in today's business environment is increasing in importance.
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Mail surveys are considered successful when 15-25 percent of the questionnaires are completed and returned.
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Net operating income is calculated before other income and interest expense.
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One disadvantage of a cooperative is that in many states each member only has one vote regardless of how many shares of cooperative stock the individual owns.
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One disadvantage of focus group interviews is the possibility of creating a "bandwagon" effect.
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One of the best ways to learn about customers' perceptions of a product is through interviews.
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One of the reasons financial ratio analysis is used to measure financial performance is so the firm's condition and performance may be compared to other similar firms.
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One simple, but effective method for analyzing competition is to complete a formal strengths and weakness analysis for each competitor.
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One special problem in cost classification is lumpiness.
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Operations management focuses on the direction and the control of the processes used to produce the goods and services that we buy and use each day.
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Performance objectives provide the performance targets at the unit and/or individual levels that are needed to accomplish strategic goals.
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Production agriculture includes the farms and ranches that produce the crop and livestock products that provide inputs to the food and fiber sector.
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Providing customers with unique products and services that are unavailable from other firms is known as differential advantage.
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Pursuing a competitive advantage means that a firm pursues a set of competencies where the firm has a clear and distinct advantage over the competition.
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Tactical planning is focused on developing courses of action for the longer term.
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Tactical planning is focused on what is done tomorrow, or next month, or next year, and can occur at any level in an organization.
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The US food production and marketing system represents 4.9 percent of the total value added production to GDP.
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The ability of a firm to meet all financial commitments is called its solvency.
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The accounting period used by some agribusiness firms is a fiscal year that may be different than a calendar year.
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The collection and use of information for the purpose of helping managers guide the operation of the business intelligently and making good management decisions that are consistent with the needs, objectives, and goals of the company are referred to as managerial accounting.
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The first step in developing a strategic marketing plan is to conduct a SWOT analysis.
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The legal document that is filed with the state and which sets forth the basic purpose of a corporation and the means of financing is called the articles of incorporation.
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The old saying, "Build a better mousetrap and the world will beat a path to your door," reflects a product-driven marketing philosophy.
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The second step in volume-cost analysis procedure is to summarize fixed and variable costs.
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The set of ratios that is used to evaluate an agribusiness firm may differ from the set of ratios used to evaluate a nonagricultural firm.
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Usually, short-term loans to agribusinesses are self-liquidating.
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Well-stated goals should allow appraisal of the results contributed by each unit or person.
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When a lending institution requires that a certain amount (service charges based on the face value of the loan) be paid at the start of the loan, the amount paid is called points.
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When calculating the inventory turnover ratio, users may use the ending inventory or the average inventory for the year.
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When calculating the leverage ratio used in the profitability analysis model, total assets is divided by total equity.
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When the value of the US dollar decreases relative to the currencies of other competitors, US agricultural goods become less expensive.
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Wholesale agents buy and/or sell as representatives of others for a commission, so they typically neither physically handle nor take title to the goods.
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