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Age 351/Are 351:Farm Management Question Paper
Age 351/Are 351:Farm Management
Course:Bachelor Of Science In Agricultural Economics
Institution: University Of Eldoret question papers
Exam Year:2016
UNIVERSITY OF ELDORET
SCHOOL OF AGRICULTURE AND BIOTECHNOLOGY
DEPARTMENT OF AGRICULTURAL ECONOMICS AND RURAL DEVELOPMENT
THIRD YEAR FIRST SEMESTER ,2016/2017 ACADEMIC YEAR
Bsc.IN AGRICULTURAL ECONOMICS
AGE 351/ARE 351:FARM MANAGEMENT
MAIN EXAMS
INSTRUCTIONS:
1.Answer question one and any other two questions
2.Question 1 carries 30 marks and the other two 20 marks each
QUESTION ONE (30mks)
Write short notes on the following as used in farm business management
a)Current ratio
b)Equity/asset ratio
c)Balance sheet
d)Whole farm budgets
e)Partial budgets
f)Objectives of farms (2 marks)
Give two examples of risk management strategies that fall into each of the following general categories:
a)Reduce the range of possible outcomes
b)Guarantee a minimum result for a fixed cost
c)increase flexibility of decision making
d)improve risk _bearing ability(4 marks)
An asset in worth Shs.6,000.If at the end of it's useful life it is given a salvage value of Shs.100.Calculate the annual depreciation, remaining balance at the end of each year for 10 years using:
a)straight line
b)Declining balance
c)sum _of_years digits(14marks)
QUESTION TWO
a ) Define asset valuation as used in farm business management
(4 marks)
b)state and explain the various methods of farm asset valuation
(16marks)
QUESTION THREE
a)Mr.Kiptoo sprays his cotton with pesticides but does not use fertilizer. He discovers that fertilizer use would probably increase his/her yield by 30.5 kg / Ha.
Each kg of cotton is sold at Kshs 1.8.However, the fertilizer would cost Kshs thirty (30) per ha and to get the required responses / he would have to add soluble boron to his/her pesticide mixture at a cost of Kshs 4.50 per Ha .In addition,the higher yield would raise the cost of casual labour by Kshs 6 per Ha.
Prepare a partial budget and explain whether it would pay if Mr. Kiptoo applies fertilizer to his cotton?(8marks)
b)Define the term farm plan giving the types of farm planning (4marks)
c)Explain the importance of farm planning (8marks)
Q
QUESTION FOUR
a)An enterprise budget for soybeans shows a yield of 46 bushels, a selling price of $8.85 per bushel and total costs of $386.00 per acre.What is the cost of production?
The break _even yield? The break_even price? (5marks)
b)The following account balances appeared in the books of Mrs.C.Otieno' s company Ltd as at 31 December 2015.
cash,checking account, savings account=5,100.00
accounts payable=853.00
bank note=4,500.00
intermediate and long term ,not due in one year=6,400.00
accrued taxes interest=2,693.00
poultry_200 birds @$3.00=600.00
machinery (3_year note)=10,234.00
machinery, equipment, vehicles=41,800.00
pickup (3_year note,10%)=3,714.00
personal vehicles=15,000.00
Equip .(6_year note,9%)=3,479.00
household and personal effects=10,000.00
IRA=30,000.00
farm real estate (30_year note,7%)=57,600.00
Farmland (30 acres @$ 5,000.)=150,000.00
buildings and improvements=82,000.00
building (10 year note,8%)=14,000.00
non_farm real estate=25,000.00
Required
prepare a balance sheet as at 31 December 2015 to determine the capital employed.
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