test3-sample

test3-sample - Exam III Name _ Farm Management, sample _...

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1 Exam III Name _______________________ Farm Management, sample ______________________________________________________________________________ Part I. T or F, 2 points each T F 1) Total annual costs for a farm machine that is purchased new tend to decrease rapidly the first few years, then decrease more slowly, then eventually increase. T F 2) Prices or yields that are highly variable over time will have a small standard deviation. T F 3) The MACRS class life for beef animals used for breeding purposes is 5 years. T F 4) Cash accounting allows for more flexible treatment of income tax planning than does accrual accounting. T F 5) Under accrual accounting, inventory changes would not figure into the calculation of income taxes owed. T F 6) In most states it is legal to ask prospective employees questions about their age so that you can avoid hiring someone who is "too old and set in his ways". T F 7) Farmland values tend to rise as the real interest rate rises. T F 8) Because of the half-year rule, a 5-year class life asset will still have some tax depreciation in the sixth year it is owned. T F 9) When real, long-term interest rates are rising, land values tend to rise also. T F 10) The minimum age for employment on a farm for a child who is not the son or daughter of the farm operator during after school hours is 16.
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2 Multiple Choice 3 points each. 1. Which type of lease agreement results in the most price and yield risk for the tenant? a. fixed cash b. flexible cash c. crop share d. custom farming 2. When long-term interest rates are 10 percent and the rate of inflation is expected to be 4 percent, a farm with an estimated net return to land investment of $90 per acre would have a value of $______ per acre using the income capitalization approach to land valuation. a. $643
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test3-sample - Exam III Name _ Farm Management, sample _...

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