AAEC 3980 Quizzes
average product is: zero when total product maximized AP=Y/X At its highest when total product is maximized the change in output given a change in input
AP=Y/X
when thinking about time value of money, the method of compounding enables managers to answer the question of: "how much money do i need to put into a savings account today to obtain 40,000 in the future?
false
elasticity is: %∆Q/1%∆ in P or I either elastic, inelastic or unitary the change in quantity demanded relative to changes in prices and income %∆Q/%∆P
all are correct
which of the following would be part of the business plan? 3-5 yr financial plan good pricing strategy evidence of thorough knowledge of consumer clear statement of firm's purpose and object
all are correct
if the calculated price elasticity of granola is -1.5 then: granola is normal demand for granola elastic total revenue would go up if firm decreased price 1% increase in price=1.5% decrease in demand
all correct
which of the following data are necessary to conduct a capital budget analysis and decision? all answer choices discount rate initial investment terminal value net cash flow
all of the other choices are correct
commitment to the golden rules of success results in
all other choices
taxes: when lower, can increase the likelihood of investment in capital assets by the business all the other choices have no impact on the discount rate unless 100% of investment is financed impact cash flows because interest expense and depreciation are tax dedcutible
all the other choices
the best investment in capital is the one that provides: the lowest risk all the other choices highest long-term profit among the alternatives positive long-term profit benefits sooner than later
all the other choices
which of the following capital budgeting methods does not use the time value of money? amortization method or equivalent annual cost method average annual rate of return net present value internal rate of return benefit/cost ratio
average annual rate of return
as a manager, dealing with employee performance is critical. in dealing with negative performance, the manager should do all the following except
avoid feeling uncomfortable by talking to the employee about their poor performance a peer of the employee tell them their job has been eliminated
Critical tasks are activities that must be done well if the business is to achieve its purpose and financial and marketing objectives
true
Profit is maximized when marginal revenue equals marginal cost
true
a business with a debt to equity ration of .69 means that creditors have a relative investment of .69/$ put up by the owners of the firm and also means that the business is solvent
true
a firm is economically efficient when they maximize the output per unit of input
true
a major requirement for successful selling is to listen to the customer and let them define their reasons for buying
true
agribusiness management is an art supported by science
true
all employees are involved in selling a firm's products and services by making sure the right product is at the right price in the right place at the right time
true
cycles or cyclical patterns reflect biological lags of approximately 4 yrs in hogs and 8-12 in cattle
true
demand is a schedule of how much consumers are willing and able to buy at various prices
true
great managers know how to motivate their employees to orderly and collectively maximize the value of their work in accomplishing the firm's purpose and objectives
true
net working capital is current assets minus current liabilities
true
successful managers treat customers the way customers want to be treated
true
the accounting equation, calculated with data found on the balance sheet is: Assets=liabilities +owners' equity
true
the agri-food system includes the agribusiness firms that are input suppliers, producers, commodity processors, food manufacturers, food distributors and food retailers
true
the best salespeople are those who believe passionately in the value of their products and are able to communicate that value effectively to their customers
true
the budgeting process is valuable because the agribusiness manager is required to think clearly through the firm's costs and revenues
true
the equimarginal principle of allocation suggests that firms should always use inputs where they give the greatest return
true
the long-run success of agribusinesses requires that they be the first choice of their customers, employees, and investors
true
the long-run success of an agribusiness requires that they be the first choice of their customers, employees, and investors
true
the principle of diminishing marginal returns teaches managers that just making the operation bigger is not always the way to make it more profitable
true
the profit and loss statement records revenues earned and expenses incurred for the current accounting period
true
the role of marketing is to bridge the gap between the conflicting needs of producers and consumers by completing the production process
true
there are three main types of leases: operating, financial, and lease-to-purchase
true
the organizing function of management does all the following except:
uses forecasting to evaluate both past and current conditions to make predictions of future customer demands and business decisions
When given a choice, consumers will always select the item that gives them the highest satisfaction because of the economic principle of
utility maximization
the discount rate is not: when low, makes it harder for the firm to find acceptable projects a firm's required rate of return on its equity capital affected by taxes unless 100% financed by debt important to the long-run financial survival of a firm when high, makes it harder for the firm to find acceptable projects
when low, makes it harder for the firm to find acceptable projects
the pro forma cash flow budget answers the ?s except: when does business need to borrow money? when will the business management get a pay raise? how will borrowed money be repaid? does the business need to borrow money?
when will the business management get a pay raise?
assume a firm has a land debt of 300,000 at 8.25% and an operating note over the past few years that averages 65000/yr at 6.75%. what is the weighted average cost of borrowed capital?
8%
if the seasonal price index number for April is 91.6, what percentage of the average annual price is the price in April during a normal year?
91.6%
capital budgeting investment opportunities occur when: a new breed of livestock is created a depreciable asset needs to be replaced or a cost-reducing/income-increasing investment is adopted all of the other choices the firm's main competition buys new property the manager feels like taking a gamble
a depreciable asset needs to be replaced or a cost-reducing/income-increasing investment is adopted
which of the following is not an asset: cash accounts payable accounts receivable cash value of life insurance on key employees inventory
accounts payable
autonomous profit centers: offer fast performance feedback put people in charge of their own destiny can be accomplished with minimum numbers of management levels all of the other answer choices are correct keep work units small enough that people have a sense of involvement and achievement
all of the other answer choices are correct
gross margin is: what remains after subtracting cost of goods sold from sales revenues income remaining to cover operating expenses all of the other answer choices equivalent to contribution revenue from sales minus cost of goods sold
all of the other answer choices are correct
inventory impacts profits because: inventory has carrying costs inventory has value and/or cost all of the other answer choices are correct inventory can become obsolete inventory can be subject to shrinkage if perishable
all of the other answer choices are correct
the internal rate of return method in capital budgeting is: the discount rate where the present value of an investment's benefits equal the present value of its costs a variation on the net present value method the discount rate where NPV equals 0 better than the average rate of return method because it incorporates the time value of money all of the other answer choices
all of the other answer choices are correct of the internal rate of return method
depreciation is: a non-cash expense all of the other choices the funds that need to be set aside in order to replace the asset being depreciated tax deductible an accounting procedure by which the purchase cost of an asset is prorated over its useful life
all of the other answer choices are true statements about depreciation
firms must earn their right to make a profit. long-run financial success requires that
all of the other choices
you determine a trend line for eggs starting at 1.85/dozen at the beginning of 2012 and ending with 4.95/dozen in decmeber 2015. the trend is
both +.775/yr and +.065/month
there are 4 tools of financial analysis, which is not one? index-number trend series comparative financial statements specific financial performance measures common-size financial statements breakeven analysis
breakeven analysis
consumers consume a variety of goods because of the economic principle of
diminishing marginal utility
the business plan is designed to
communicates purpose and objectives of the firm
which of the following is not one of the 4 cost items that a manager must monitor
competition
when thinking about the five barriers to consumer satisfaction, the processing function of marketing helps consumers overcome the barrier of ownership separation
false
an agribusiness's purpose and objective should include the following: personnel plan income statement SWOT none are correct description of how the firm will gain its competitive edge in the marketplace
description of how the firm will gain its competitive edge in the marketplace
the control function of management is expressed in 7 steps, which is not one of them: develop a management information system identify and implement corrective actions identify financial performance criteria develop a written business plan determine targets for financial performance measures
develop a written business plan
line personnel are not: sales managers authorized to make decisions employed by HR able to directly impact profits
employed in HR department of the firm
A business is insolvent when assets exceed liabilities
false
Agribusiness managers need only to be great communicators, motivators and leaders to be successful
false
a sustainable competitive advantage can come from being either the highest cost provider of a product or by offering a differentiated product
false
annual performance reviews are typically not a standard part of a manger's responsibility
false
consumer tastes and preferences have become more homogenous and predictable as a result of globalization
false
internal selling is sales of the firm's products and services to the customer
false
marginal product is determined by dividing the change in output by the corresponding level of input or in the equation MP=∆Y/X
false
price is the sole component of value as perceived by customers
false
selling on purpose occurs when the salesperson persuades a customer to buy more than they needed so they can get a higher commission
false
the average rate of return is the best method for evaluating a capital budget decision because it uses the time value of money
false
the cash flow budget assesses loan repayability and provides information on profitability
false
the four functions of management are planning, organizing, controlling, and deciding
false
the payback method in capital budgeting decisions is calculated by dividing the cost of investment by the useful life of the investment
false
the purpose of calculating the real price from a nominal price series is to eliminate the effects of population from the data
false
the purpose of computing a moving average for a prices series is to reduce the impact of short-run fluctuations by plotting every single data point
false
the sole proprietorship is the most popular structure because it is easy to form and limits owners' personal liability in covering debt obligations of the business
false
the three major types of budgets are the operating, income statement, and capital expenditures
false
the three types of partnerships are general, cooperative and limited liability
false
the world has three constants: stability, principles, and choices
false
when it comes to the four principles of organizational design, working units need to be all inclusive of everyone in the business from staff and line personnel to junior and senior management
false
if the calculated income elasticity of granola is +.9 then:
granola is a necessity
the participatory style of management
involves employees in decision-making and the planning of work objectives
the following are true of leases except
lease-with-option-to-purchase has tax deductible lease payments
decentralized management allows: means less work for top management experience managers to make all decisions all decision making authority to be held by top execs more control over all aspects of the firm by top lower level managers to develop decision making skills
lower level managers to develop decision making skills
to be at a profitable level of production, the producer must do all of the following in the production process, except: maximize output per unit input maximize marginal product cease when marginal product becomes 0 cease when total product is maxmized maximize average product
maximize marginal product
the controls in the controlling function of management should:
measure progress toward goals and alert management to serious deviations
the main objective of the directing function of management is to:
motivate and lead employees to accomplish the firm's purpose and objectives via the three functions of management
there are six steps in the decision-making process, which is not one: none of the other answer choices are correct implement the decision analyze the alternatives identify problem follow-up
none are correct
the following types of budgets are related to each other
operating cash flow and capital expenditures
the following are all examples of data that go into calculating the initial investment of a capital asset, except: acquisition cost borrowed funds salvage value of replaced asset operating expenses of the asset freight installation
operating expenses of the asset
which of the following is not one of the 6 revenue items that a manager must monitor
plant size
the four Ps of marketing in the marketing mix are
promotion, price, product, place
the main objective of the planning function of management is to:
put the firm in the best possible position relative to future business conditions and customer demands
risk and uncertainty are not: death with by calculating alternative outcomes a result of changes in government farm programs death with by calculating break-even cash flows a result of changes in technology rare occurrences in agribusiness because of the stability of the industry
rare occurrences in agribusiness because of the stability of the industry
the following are examples of corporations except: cooperative s-corporation registered limited partnership non-profit organization limited liability company
registered limited partnership
the best forecasts are those that
related the impact of macroeconomic variables to changes in a firm's sales and costs
which of the following are not one of the 9 elements that should be included in a job description for an agribusiness
religious preference
cash flow budget is composed of these major components except
retained earnings
which of the following ratios measures profitability? accounts receivable ratio quick ratio acid test ratio inventory turn over ratio return on investment ratio
return on investment ratio
there are 5 human needs that work can fulfill. which is not one of them?
speed
which of the following statements is not true?
the transportation function overcomes the barrier of time and separation
A manager who wants to prevent stockout and ensure that his business always has products on hand for sale has a good reason to hold inventory
true
