2014 MISSOURI FFA FARM MANAGEMENT CONTEST
This exam and others are available at http://adultaged.missouri.edu/moaged/exams.htm
Multiple Choice Section
The Farm Management Contest is designed to test student understanding of the application of
economic principles in farm management. Each question is worth three (3) points.
Choose the best answer and mark the appropriate box on the score sheet. There is only one
correct answer to each question.
1.
Pat had a net farm income of $30,000. Pat had total business assets of $500,000 and total
liabilities of $200,000. Pat paid $16,000 in interest. Return on assets would be:
A. 9%
B. 10%
C. 11%
D. 15%
E. None of the above
2.
A cord of fire wood is a stack that contains
A. 64 cubic feet.
B. 100 cubic feet.
C. 128 cubic feet.
D. 256 cubic feet.
E. None of the above
3.
A corn producer decides to store his soybeans in the local elevator for 4 months. The price
at harvest is $4.50 per bushel and the elevator charges 2 cents per bushel per month for
storage plus a 5 cents per bushel handling charge. He has 4,000 bushels to sell and must
borrow $18,000 at 6% annual interest while he stores the corn. What price must he receive
for his corn to break even and cover his storage and opportunity costs?
A. $4.58
B. $4.63
C. $4.72
D. $4.77
E. None of the above
4.
A $40,000 loan amortized at 6% interest for 5 years yields annual payments of $9,495.77.
How much of the first year's payment is principal?
A. $2,500.00
B. $6,712.46
C. $7,095.77
D. $10,971.30
E. None of the above
5.
For the above loan of $40,000, if the fifth and final payment includes $537.52 of interest,
what was the outstanding principal balance after the fourth payment?
A. $7,421.87
B. $8,189.87
C. $8,958.25
D. $9,003.25
E. None of the above
6.
If the interest rate is 7% compounded annually, what is the present value of a dollar to be
received by a producer two years from now?
A. $0.873
B. $0.926
C. $1.070
D. $1.145
E. None of the above
7.
How many pounds are in a metric ton?
A. 2,000.0
B. 2,204.6
C. 3,666.7
D. 4,012.5
E. None of the above
8.
Using leverage to expand your business will increase profitability if your
A. return on equity equals the interest rate.
B. return on equity is lower than the interest rate.
C. return on assets is higher than the interest rate.
D. return on assets is lower than the interest rate.
E. None of the above
9.
Chris purchased a group of weaner pigs weighing 12 pounds each and sold them weighing
278 pounds after feeding them for 160 days. Each pig ate 750 pounds of feed during the
feeding period. Average daily gain for each pig in the group (gain per day) during the
feeding period was
A. 2.95 pounds/day.
B. 1.92 pounds/day.
C. 1.66 pounds/day.
D. .285 pounds/day.
E. None of the above
10.
A farmer purchases 700-pound feeder steers for $1.80 per pound and plans to sell the steers
at 1300 pounds. The farmer estimates the total cost of gain to be $0.91 per pound. The
nearest breakeven price when the steers are sold at 1300 pounds is
A. $1.25/pound.
B. $1.32/pound.
C. $1.39/pound.
D. $1.43/pound.
E. None of the above
11.
A farmer has total assets of $500,000 of which land is $300,000. The farmer's debt:equity
ratio is 0.6. What will the farmer's debt:equity ratio be if the land value increases by 10%?
A. 0.45
B. 0.47
C. 0.53
D. 0.55
E. None of the above
12.
A grain farmer who normally stores his soybeans at a local elevator has decided to use the
options market to create a synthetic storage. To do so he will sell his beans at harvest and
A. buy a put option.
B. sell a put option.
C. buy a call option.
D. sell a call option.
13.
How many total acres are included in "E 1/2 of SW 1/4 and E 1/2 of NW 1/4 of Section 15,
Twp. 10N, R4W of the 5th Principle Meridian"?
A. 80 acres
B. 120 acres
C. 160 acres
D. 320 acres
E. None of the above
14.
How much perimeter fence would be required to completely enclose the parcel of land
described in the question above?
A. 1.0 mile
B. 1.5 miles
C. 2.0 miles
D. 2.5 miles
E. None of the above
15.
The price of a product changes from $100 to $90 and, as a result, the quantity demanded
increased from 50 to 60 units. From this we can conclude that
A. the demand is elastic.
B. the demand is inelastic.
C. the demand is of unit elasticity.
D. the demand has increased.
E. None of the above
16.
Corn and grain sorghum are substitutes for each other in many livestock feed rations.
Assuming they are substitutes, an increase in the supply of corn would cause the demand
for grain sorghum to
A. shift to the left.
B. shift to the right.
C. increase.
D. remain unchanged.
E. none of the above
17.
If quantity supplied changes by 10% when price changes by 5%, the price elasticity of
supply is
A. 0.2
B. 0.5
C. 2
D. 5
E. None of the above
18.
Joe estimates his irrigation lake contains one million cubic feet of water. How many inches
of water can he apply to a 39-acre corn field located next to the lake?
A. 5
B. 6
C. 7
D. 8
E. All of the above
19.
Corn has an expected yield of 160 bushels per acre and has a production cost of $375 per
acre. Current market prices are $5 per bushel for corn and $13 per bushel for soybeans.
Soybeans can be raised at a production cost of $250 per acre. At what breakeven yield per
acre would soybeans generate the same net return per acre as dryland corn?
A. 41.9 bushels
B. 45.2 bushels
C. 51.9 bushels
D. 63.3 bushels
E. None of the above
20.
Anna borrowed $15,000 on April 1 to cover the cost of planting soybeans. She repaid the
loan on November 1 along with $577.50 in interest. The interest rate she paid was
A. 6.3%
B. 6.6%
C. 6.9%
D. 7.7%
E. None of the above
21.
A speculator with a short position in the futures market
A. profits when prices go down, loses when prices go up.
B. profits when prices neither go up nor down.
C. profits when prices go up, loses when prices go down.
D. loses when prices go down.
22.
How many pounds of 48% protein supplement must be mixed with 11% protein wheat to
make a ton of 16% protein feed?
A. 270 pounds
B. 350 pounds
C. 400 pounds
D. 550 pounds
E. None of the above
23.
A Subchapter S corporation can have no more than
A. 10 shareholders.
B. 35 shareholders.
C. 75 shareholders.
D. 100 shareholders.
E. There is no limit on number of shareholders.
24.
The capital gains taxes that would be due should a farmer sell his land is an example of a
A. current liability.
B. long-term liability.
C. deductible expense.
D. contingent liability.
E. None of the above
25.
Which of the following would decrease a crop farm’s capital turnover ratio?
A. Higher yields
B. Higher crop prices
C. Lower land prices
D. All of the above
E. None of the above
26.
For self-employed individuals whose income is above the wage base, the Medicare tax rate is
A. 1.5%
B. 2.9%
C. 5.8%
D. 6.5%
E. None of the above
27.
A cattle feeder, wishing to use futures markets to hedge the price of slaughter cattle, would at
the time of his cattle purchase
A. buy futures contracts expecting to sell the contracts when selling cattle.
B. sell futures contracts expecting to sell more contracts when selling cattle.
C. sell futures contracts expecting to buy contracts when selling cattle.
D. buy futures contracts expecting to buy more contracts when selling cattle.
E. None of the above
28.
An increase in the value of the U.S. dollar relative to the currency of other countries should
result in
A. more costly imports.
B. less costly imports.
C. increased exports.
D. no effect on imports or exports.
E. None of the above
29.
A feedlot operator buys feeder steers, finishes them, and sells them. The operator estimates
that finished steers will sell for $130 per cwt. and that it will cost $450 per head to bring them
from the 750-pound purchase weight to the 1250-pound selling weight. What is the highest
price the operator can pay for 750-pound feeder steers to break even?
A. $132.17/cwt.
B. $140.83/cwt.
C. $149.18/cwt.
D. $156.67/cwt.
E. None of the above
30.
How many acres are in a rectangular field that is 102 yards long and 55 yards wide?
A. 0.13 acres
B. 0.97 acres
C. 1.16 acres
D. 9.56 acres
E. None of the above
31.
A projection of all income and expenses associated with growing an acre of a particular crop
would be called
A. a partial budget.
B. an enterprise budget.
C. a whole farm budget.
D. an income statement.
E. a balance sheet.
32.
The maximum Section 179 expensing deduction that could be claimed in 2013 was
A. $50,000.
B. $100,000.
C. $250,000.
D. $500,000.
E. None of the above
33.
In order to claim the maximum allowable Section 179 expensing deduction in 2013, the
amount of qualified property placed in service during 2013 must be no more than
A. $1 million.
B. $2 million.
C. $3 million.
D. $5 million.
E. None of the above
34.
The Social Security wage base for 2013 was
A. $105,200.
B. $107,500.
C. $110,100.
D. $113,700.
E. None of the above
35.
In a livestock enterprise budget prepared on July 1, home-grown feed
A. should not be included as a cost.
B. should be included, valued at its net market price.
C. should be included valued at its cost of production.
D. should be valued at past year’s inventory value.
E. None of the above
36.
A producer sells 7 feeder steers for $180/cwt. The average weight per steer is 752 pounds.
There is a 2% sales commission and yardage fees of $4 per head. The net amount received for
the pen of steers would be
A. $1,026.00
B. $9,186.75
C. $9,187.42
D. $9,257.70
E. None of the above
37.
There is not a CME Group soybean futures contract for which of these months?
A. May
B. July
C. September
D. December
E. None of the above
38.
If the rate of return to assets is 10% and the average interest rate is 7%, what would the debtto-equity ratio need to be in order to earn a rate of return on equity of 12%?
A. 33%
B. 40%
C. 67%
D. 75%
E. None of the above
39.
A CME Group hog futures contract covers how many pounds of market hogs?
A. 30,000
B. 40,000
C. 50,000
D. 60,000
E. None of the above
40.
Farmer Jones wants to plant a crop with a 4-inch spacing in 30-inch rows. If there are 100,000
seeds in a bushel, how many bushels will she seed per acre.
A. 0.24
B. 0.52
C. 0.60
D. 1.07
E. None of the above
41.
Assume a market hog weighs 285 pounds when loaded on a truck, weighs 279 pounds when
unloaded at the slaughter plant, and yields a carcass that weighs 211 pounds. If the packer
pays $102.50/cwt. of carcass weight for the hog, what is the equivalent live value of the hog
when it left the farm?
A. $75.89/cwt.
B. $77.52/cwt.
C. $79.16/cwt.
D. $80.55/cwt.
E. None of the above
42.
The USDA agency with primary responsibility for improving foreign market access for U.S.
products is
A. FAS.
B. ERS.
C. FS.
E. FSA.
E. None of the above
43.
A price ceiling set below the equilibrium price creates
A. shortages.
B. black markets.
C. surpluses.
D. A and B.
E. None of the above
44.
The income that could have been received if the input had been used in its most profitable
alternative use is
A. alternative income.
B. marginal revenue.
C. not important in agriculture.
D. opportunity cost.
E. None of the above
45.
By weight, anhydrous ammonia is 82.3% nitrogen. By weight, ammonium nitrate is 35%
nitrogen. If anhydrous ammonia costs $900 per ton, what price per pound for ammonium
nitrate would yield the same cost per pound of nitrogen as anhydrous ammonia?
A. $0.191
B. $0.547
C. $1.058
D. $1.560
E. None of the above
46.
If a farmer is to carry a hedge through to completion, the farmer
A. will always make a profit.
B. must always deliver the hedged commodity at the local elevator.
C. must be prepared to meet all margin calls.
D. must avoid using options.
E. None of the above
47.
Salvage values do not need to be considered when comparing a cash outright purchase to
A. a credit purchase.
B. a financial lease.
C. custom hire.
D. All of these
E. None of these
48.
Operating costs do not need to be considered when comparing custom hire to
A. a cash outright purchase.
B. a financial lease.
C. a credit purchase.
D. All of these
E. None of these
49.
The value of operator labor needs to be considered when comparing a credit purchase to
A. a cash outright purchase.
B. a financial lease.
C. custom hire.
D. All of these
E. None of these
50.
Chris has net farm income of $48,155 and no other taxable income. He must pay the selfemployment tax on what percent of his net farm income?
A. 0%
B. 15.3%
C. 92.35%
D. 100.0%
E. None of these
2014 MISSOURI FFA FARM MANAGEMENT CONTEST
This exam and others are available at http://adultaged.missouri.edu/moaged/exams.htm
Problems Section
Choose the best answer and mark the corresponding numbered space on the answer
sheet. Each question is worth four (4) points. There is only one correct answer for each
question. Answers have been rounded.
PROBLEM I - Balance Sheet
Using the information below, complete the net worth statement for January 1, 2014:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$550,000
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . .
1,070
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . .
110,000
Cows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84,000
Calves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,000
Rams and ewes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,500
Lambs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,200
Corn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,750
Machine shed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,000
Checking and savings . . . . . . . . . . . . . . . . . . . . . . . . .
12,620
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .
410
Feed and hay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,300
Accrued interest owed . . . . . . . . . . . . . . . . . . . . . . . . .
17,500
Accrued taxes owed . . . . . . . . . . . . . . . . . . . . . . . . . .
5,100
30-year land loan balance is $290,000.
$24,000 plus interest is due March 1 of each year.
5-year machine shed loan balance is $40,000.
$10,000 plus interest is due December 31 of each year.
3-year tractor loan balance is $27,000.
$9,000 plus interest is due each November 1.
Current Assets:
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Total _________________
Current Liabilities:
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
Total __________________
Non-current Assets:
Non-current Liabilities:
__________________________________
_________________________________
__________________________________
_________________________________
__________________________________
_________________________________
__________________________________
_________________________________
__________________________________
_________________________________
__________________________________
_________________________________
__________________________________
_________________________________
__________________________________
_________________________________
Total _________________
Total __________________
Total Assets _________________
Total Liabilities __________________
Net Worth _________________
Questions 1 through 7 refer to PROBLEM I
1. The total value of current assets on January 1, 2014, was:
A. $66,870
B. $67,940
C. $68,350
D. $77,440
E. None of the above
2. The total value of non-current assets was:
A. $66,010
B. $794,000
C. $803,500
D. $871,440
E. None of the above
3. The total value of current liabilities was:
A. $26,700
B. $65,600
C. $66,010
D. $314,000
E. None of the above
4. The total value of non-current liabilities was:
A. $314,000
B. $315,070
C. $357,000
D. $380,000
E. None of the above
5. The net worth was:
A. $511,926
B. $834,483
C. $945,374
D. $1,457,300
E. None of the above
6. The current ratio was:
A. 0.972
B. 1.029
C. 2.293
D. 2.559
E. None of the above
7. The working capital was:
A. $1,930
B. $67,940
C. $489,500
D. $491,430
E. None of the above
PROBLEM II -- Enterprise Budget
Use the following weaner pig budget to answer Questions 8 through 16.
ANNUAL BUDGET PER SOW for producing and marketing 12-pound pigs.
_______________________________________________________________________
Operating Inputs
Units
Price
Qty.
Value
Corn
Bu.
$ 5.00
22.00
$110.00
Soybean meal
Ton
420.00
0.13
54.60
Distillers grain
Ton
170.00
0.21
35.70
Other feed
Cwt.
25.00
1.40
35.00
Feed processing
Cwt.
0.55
20.52
11.29
Hauling
Dol.
25.00
Custom manure spreading
100 Gal.
1.00
7.32
7.32
Vet. & medical supplies
Head
1.90
22.00
41.80
Boar semen
Dol.
30.00
Utilities
Dol.
5.00
Annual operating capital
Dol.
0.07
84.86
5.94
Machinery labor
Hour
12.00
2.00
24.00
Animal labor
Hour
12.00
8.00
96.00
Mach. fuel, lube, repair
Dol.
4.50
Replacement gilts
Head
300.00
0.50
150.00
Total operating costs . . . . . . . . . . . . . . . . . $636.15
Fixed costs
Equipment:
Amount
Value
Interest at 7.0%
331.40
23.20
Depr., taxes, insurance
45.50
Buildings:
Interest at 7.0%
425.70
29.80
Depr., taxes, insurance
51.10
Total fixed costs
. . . . . . . . . . . . . . . . .
Production
Weaner pigs
Cull sows
Total receipts
Units
Head
Cwt.
. . . . . . . . . .
Price
Qty.
45.50
22.0
80.00
2.5
. . . . . . . . .
Returns above total operating costs
$149.60
Value
$1,001.00
200.00
$1,201.00
$564.85
Returns above all specified costs
$415.25
_______________________________________________________________________
8. The return above total operating cost per sow is:
A. $415.25
B. $564.85
C. $636.15
D. $1,201.00
E. None of the above
9.
How many hours of labor are budgeted per sow?
A. 2.00
B. 8.00
C. 10.00
D. 12.00
E. None of the above
10.
What is the total budgeted interest cost per sow?
A. $23.20
B. $29.80
C. $53.00
D. $58.94
E. None of the above
11.
What price per ton is paid for corn?
A. $5.00
B. $110.00
C. $164.23
D. $178.57
E. None of the above
12.
Including processing, what is the total feed cost per sow?
A. $226.43
B. $235.30
C. $246.59
D. $251.59
E. None of the above
13.
A pound of distiller grains costs ____% of the cost of a pound of corn.
A. 32.5
B. 34.0
C. 95.2
D. 105.0
E. None of the above
14.
What price per head for weaner pigs will cause returns above all specified costs to
equal zero?
A. $24.35
B. $26.62
C. $27.97
D. $33.67
E. None of the above
15.
If replacement gilts weigh 200 pounds, what is the feed conversion rate?
A. 3.57
B. 3.80
C. 4.96
D. 6.54
E. None of the above
16.
If an outbreak of the PED virus causes an additional 12% death loss, what price
received for weaner pigs will make the per sow receipts above all specified costs
equal zero?
A. $28.16
B. $30.26
C. $31.78
D. $37.07
E. None of the above
PROBLEM III -- Income Tax Management
Use the tables at the end of this exam to calculate depreciation on the following item.
On April 5, 2013, Jill traded planters. The old planter had a remaining undepreciated
value of $14,917. Jill paid $75,000 "boot" in the trade for the new planter. She elects to
roll the basis of the used planter into the new one.
17.
The planter is:
A. 3-year property
B. 5-year property
C. 7-year property
D. 10-year property
E. None of the above
18.
If Jill does not expense any of the cost of the planter, then 2013 depreciation will
be (use MACRS and mid-year convention):
A. $8,035.50
B. $9,633.71
C. $12,042.58
D. $13,487.55
E. None of the above
19.
If Jill expenses the maximum on the planter trade, and uses the mid-quarter
convention and MACRS, then 2013 depreciation will be:
A. $0.00
B. $1,997.83
C. $2,796.94
D. $5,346.08
E. None of the above
20.
If Jill does not expense any of the cost and uses the mid-quarter convention and
straight line depreciation over the alternate MACRS life, her 2013 depreciation
will be:
A. $4,495.85
B. $5,619.81
C. $8,028.30
D. $8,991.70
E. None of the above
21.
If Jill uses regular MACRS, then the first year the planter will appear on Jill's
January balance sheet with a zero book value will be in
A. 2018.
B. 2019.
C. 2020.
D. 2021.
E. None of the above
22.
Under MACRS, an irrigation well is classified as
A. 7-year property
B. 10-year property
C. 15-year property
D. 20-year property
E. None of the above
PROBLEM IV – Supply and Demand
The above graph represents the supply of foreign cheese available for import into the U.S.
(SF), the supply of cheese produced in the U.S. (SUS), the total supply of cheese in the U.S.
(ST), the foreign demand for U.S. cheese (DF), the domestic demand for cheese (DUS), and the
total demand for cheese (DT).
23.
What is the market equilibrium price of cheese in the U.S.?
A. P1
B. P2
C. P3
D. P4
E. None of the above
24.
At the market equilibrium price, how much cheese will be exported from the U.S.?
A. Q1
B. Q2
C. Q3
D. Q4
E. Q5
25.
At the market equilibrium price, how much cheese will be imported?
A. Q1
B. Q2
C. Q3
D. Q4
E. Q5
26.
Without foreign trade, the equilibrium price of cheese would be
A. P1
B. P2
C. P3
D. P4
E. None of the above
27.
P3 times Q1 equals
A. the total value of cheese imports.
B. the total value of cheese exports.
C. value of imports minus exports.
D. value of exports minus imports.
E. None of the above
28.
What is the value of cheese consumed in the U.S.?
A. P1 times Q1
B. P2 times Q2
C. P3 times Q3
D. P3 times Q5
E. None of the above
PROBLEM V - Marketing
On December 1, a farmer has 6,000 bushels of corn in his bin. He sells it on February 15.
Ignore commissions, storage cost, and interest.
December 1 quotes:
February 15 quotes:
March futures price = $5.20
Expected basis = $0.10 under the board
March futures price = $5.25
Basis = $0.15 under the board
Strike
price
$4.80
$4.90
$5.00
$5.10
$5.20
$5.30
---- Premiums ---Call
Put
$0.42
$0.01
$0.32
$0.01
$0.23
$0.01
$0.15
$0.02
$0.09
$0.08
$0.04
$0.16
---- Premiums ---Call
Put
$0.38
$0.01
$0.28
$0.01
$0.18
$0.01
$0.09
$0.02
$0.02
$0.05
$0.01
$0.13
29.
What is the local cash price of corn on February 15?
A. $5.00
B. $5.10
C. $5.15
D. $5.30
E. None of the above
30.
If the farmer sold a futures contract on December 1 and bought back the contract on
February 15, what would be the realized price per bushel (cash + net on futures) for the
corn?
A. $5.04
B. $5.05
C. $5.06
D. $5.07
E. None of the above
31.
If the farmer bought a $5.20 Put on December 1 and sold the Put on February 15, what
would be the realized price per bushel (cash + net on options) for his corn?
A. $5.05
B. $5.07
C. $5.13
D. $5.15
E. None of the above
32.
If the farmer bought a $5.20 Put and sold a $5.20 Call on December 1, and sold the Put
and bought back the Call on February 15, what would be the realized price per bushel
(cash + net on options) for his corn?
A. $5.07
B. $5.11
C. $5.13
D. $5.14
E. None of the above
33.
Given all the information above, which of the following actions taken on December 1
turned out to be the most profitable?
A. Selling a futures contract.
B. Buying a $5.20 Put option.
C. Buying a $5.20 Put and selling a $5.20 Call.
D. Taking no market action.
E. Selling a futures contract and buying a $5.20 put.
34.
What happens if the farmer exercises a corn futures call?
A. He becomes long a corn futures contract.
B. He becomes short a corn futures contract.
C. He must deliver 5,000 bushels of corn.
D. He must take delivery of 5,000 bushels of corn.
E. None of the above
PROBLEM VI - Diminishing Returns
Jack and Judy Johnson operate a small fruit and vegetable farm. They grow sweet corn,
tomatoes, pumpkins, and apples. They can irrigate, but their only water supply is the rural
water district. Their farm is divided into fields, each containing 36,000 sq. ft. It requires
22,500 gallons of water (costing $3.65 per 1,000 gallons) to apply one inch of water to each
field.
Expected yield in pounds
Inches
of water Sweet corn
Tomatoes
Apples
Pumpkins
0
2,000
3,100
1,000
2,500
1
2,500
3,400
1,200
2,850
2
2,900
3,650
1,300
3,200
3
3,200
3,850
1,380
3,500
4
3,400
4,000
1,430
3,750
5
3,500
4,100
1,450
3,900
35.
If the Johnsons sell sweet corn for 25¢ per pound, how much water should they apply to
their sweet corn field?
A. 1 inch
B. 2 inches
C. 3 inches
D. 4 inches
E. None of the above
36.
If tomatoes are worth 45¢ per pound, how much water should be applied to the tomato
field?
A. 1 inch
B. 2 inches
C. 3 inches
D. 4 inches
E. None of the above
37.
What price must the Johnsons receive for their apples to justify applying 4 inches of
water?
A. At least $0.61/lb.
B. At least $1.18/lb.
C. At least $1.65/lb.
D. At least $4.11/lb.
E. None of the above
38.
If apples are worth 80¢ per pound and pumpkins 35¢ per pound, which crop provides the
greatest additional return from applying 2 inches of irrigation water?
A. Sweet corn
B. Tomatoes
C. Apples
D. Pumpkins
39.
What price for water per 1,000 gallons would leave the Johnsons indifferent between 3
and 4 inches of water for the pumpkins?
A. $3.49
B. $3.68
C. $3.71
D. $3.89
E. None of the above
PROBLEM VII - Investment Analysis
Ruth Farmer has 1,000 bushels of corn stored on her farm. She can sell it at the local
elevator for $4.50 per bushel. It will cost her $.10 per bushel to haul it to the elevator. Ruth
is considering feeding the corn to some lambs. She can buy 65-pound feeder lambs for $1.80
per pound delivered to her farm.
Ruth will grind and mix her own feed. Her ration consists of 80 pounds of corn and 20
pounds of commercial feed additive. She can get the commercial additive delivered for $400
per ton.
Ruth plans to market the lambs at 120 pounds. She thinks it will take 70 days of feeding to
reach that weight. She expects a 7 to 1 feed conversion ratio.
40.
How many pounds of corn does Ruth have?
A. 1,000
B. 5,600
C. 56,000
D. 112,000
E. None of the above
41.
How much commercial feed additive will she need to buy to mix with the 1,000
bushels of corn?
A. 5.6 tons
B. 7.0 tons
C. 28.0 tons
D. 56.0 tons
E. None of the above
42.
Given the limited corn supply, how many pounds of gain (at 7 to 1) can Ruth get if she
feeds an 80-20 ration?
A. 8,000 pounds
B. 9,600 pounds
C. 10,000 pounds
D. 12,000 pounds
E. None of the above
43.
How many feeder lambs should Ruth buy (assuming a zero death loss)?
A. 145
B. 174
C. 182
D. 218
E. None of the above
Ruth decides to feed the lambs. She buys 175 which average 61 pounds each. Five die and
she sells 170 which average 118 pounds. She has 80 bushels of corn left.
44.
What feed conversion did Ruth actually get?
A. 3.21 pounds of feed per pound of gain
B. 6.59 pounds of feed per pound of gain
C. 6.65 pounds of feed per pound of gain
D. 6.86 pounds of feed per pound of gain
E. None of the above
45.
What is the total feed cost for these lambs?
A. $6,108.80
B. $6,200.80
C. $6,624.00
D. $6,716.00
E. None of the above
46.
If Ruth's costs (other than feed and lambs) were $15 per lamb purchased, what was her
breakeven selling price?
A. $139.33 per cwt.
B. $139.78 per cwt.
C. $141.89 per cwt.
D. $142.35 per cwt.
E. None of the above
PROBLEM VIII - Financial Analysis
Bill Blackacre is a cash basis taxpayer. His farm records for 2013 show the following:
2013
2013
2013
2013
2013
1/1/14
1/1/14
Farm sales
Interest paid
Net farm profit
Depreciation
Decline in inventory
Total assets
Total liabilities
$251,480
9,475
37,801
40,560
29,824
912,689
100,972
47.
Bill's capital turnover rate is
A. 15.03%
B. 24.29%
C. 27.55%
D. 30.82%
E. None of the above
48.
Bill's interest expense as a percent of sales is
A. 9.47%.
B. 7.22%.
C. 5.09%.
D. 3.77%.
E. None of the above
49.
Bill's net farm profit does not include a charge for his own labor (which he values at
$20,000 per year). Bill will have to pay self-employment taxes on
A. $17,801.
B. $20,000.
C. $37,801.
D. $67,625.
E. None of the above
50.
Bill's operating margin (profit plus inventory change) as a percent of sales was
A. 3.17%.
B. 15.03%.
C. 20.53%.
D. 26.89%.
E. None of the above
ANNUAL DEPRECIATION PERCENTAGES FOR 5-YR PROPERTY, 150% DB
_________________________________________________________________
MID-QUARTER CONVENTION
Tax
MID-YEAR
Quarter placed in service -Year CONVENTION
1
2
3
4
1
15.000%
26.250%
18.750%
11.250%
3.750%
2
25.500
22.125
24.375
26.625
28.875
3
17.850
16.520
17,062
18.637
20.212
4-5
16.660
16.520
16.763
16.567
16.404
6
8.330
2.065
6.287
10.354
14.355
Total 100.000
100.000
100.000
100.000
100.000
_________________________________________________________________
ANNUAL DEPRECIATION PERCENTAGES FOR 7-YR PROPERTY, 150% DB
_________________________________________________________________
MID-QUARTER CONVENTION
Tax
MID-YEAR
Quarter placed in service -Year CONVENTION
1
2
3
4
1
10.714%
18.750%
13.393%
8.036%
2.679%
2
19.133
17.411
18.559
19.707
20.854
3
15.033
13.680
14.582
15.484
16.386
4
12.249
12.160
12.221
12.275
12.874
5-7
12.249
12.160
12.221
12.275
12.182
8
6.124
1.520
4.582
7.673
10.661
Total 100.000
100.000
100.000
100.000
100.000
_________________________________________________________________
ANNUAL FRACTIONS FOR STRAIGHT LINE OVER N YEARS (N less than 26)
_________________________________________________________________
MID-QUARTER CONVENTION
Tax
MID-YEAR
Quarter placed in service -Year CONVENTION
1
2
3
4
1
1/2
7/8
5/8
3/8
1/8
2-N
1
1
1
1
1
N+1
1/2
1/8
3/8
5/8
7/8
_________________________________________________________________
Depreciation formula: Basis divided by N times number from above
table.
ANNUAL FRACTIONS FOR 27 1/2 YEAR PROPERTY, REGULAR MACRS
_________________________________________________________________
Tax
Month Placed in Service -Year
1
2
3
4
5
6
7
8
9
10
11
12
1
11.5 10.5 9.5 8.5 7.5 6.5 5.5 4.5 3.5 2.5 1.5 0.5
2-27
12
12
12
12
12
12
12
12
12
12
12
12
28
6.5
7.5 8.5 9.5 10.5 11.5
12
12
12
12
12
12
29
------- 0.5 1.5 2.5 3.5 4.5 5.5
_________________________________________________________________
Depreciation formula: Basis divided by 27 1/2 divided by 12 times
number from above table.
ANNUAL FRACTIONS FOR 39 YEAR PROPERTY, REGULAR MACRS
_________________________________________________________________
Tax
Month Placed in Service -Year
1
2
3
4
5
6
7
8
9
10
11
12
1
11.5 10.5 9.5 8.5 7.5 6.5 5.5 4.5 3.5 2.5 1.5 0.5
2-39
12
12
12
12
12
12
12
12
12
12
12
12
40
0.5
1.5 2.5 3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5 11.5
_________________________________________________________________
Depreciation formula: Basis divided by 39 divided by 12 times number
from above table.
2014 STATE FFA FARM MANAGEMENT CONTEST
Key
Multiple Choice
1. A
2. C
3. C
4. C
5. C
6. A
7. B
8. C
9. C
10. C
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
D
C
C
D
A
A
C
C
C
B
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
A
A
D
D
E
B
C
B
D
C
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
B
D
B
D
B
D
D
C
B
B
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
A
A
D
D
A
C
A
E
C
C
Problems
1. B
2. C
3. C
4. A
5. E
6. B
7. A
8. B
9. C
10. D
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
D
C
C
B
C
B
C
B
B
B
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
D
C
C
B
A
B
A
C
B
C
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
B
C
C
A
B
C
C
B
D
C
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
B
C
C
D
C
C
B
D
E
A