Farm & Ranch Business Management
questions well answered
Constructing a Cash Flow Budget - correct answer ✔✔1. Develop a whole-farm plan
2. Take inventory
3. Estimate crop production and livestock feed requirements
4. Estimate cash receipts from livestock
5. Estimate crop sales
6. Estimate other cash income
7. Estimate cash farm operating expenses
8. Estimate personal and non farm cash expenses
9. Estimate purchases and sales of capital assets
10. Find and record the scheduled principal and interest payments on existing debts
Uses for a Cash Flow Budget - correct answer ✔✔1. Plan borrowing and debt repayment
2. Suggest ways to minimize borrowing
3. Combine business and personal financial affairs into one complete plan
4. Help establish realistic line of credit
5. Plan purchases to obtain discounts
6. Aid tax planning
7. Find imbalances between current and concurrent debt
Cash Flow Budget - correct answer ✔✔A summary of all cash inflows and outflows for a given
future time period. No non cash entries are included. This budget can provide an estimate of
borrowing needs and repayment capacity. It can also be used to analyze the feasibility of
investment alternatives.
, 5 Sources of Risk and Uncertainty - correct answer ✔✔- production and technical risk
- price and market risk
- financial risk
- legal risk
- personal risk
Variability - correct answer ✔✔- range
- standard deviation
- coefficient of variation
- cumulative distribution function
Range - correct answer ✔✔- the range is the difference between the largest and the smallest
value
Standard Deviation - correct answer ✔✔- the standard deviation is the square root of the
variance
- to find the variance:
- subtract the mean from each observation and square the difference
- sum all these differences
- divide the number of observations minus one (N-1)
Coefficient of Variation - correct answer ✔✔- the coefficient of variation is the standard
deviation divided by the mean
- it is handy in comparing variability of outcomes with different means as it eliminates the units
- a coefficient of variation cannot be computed if the mean is O
questions well answered
Constructing a Cash Flow Budget - correct answer ✔✔1. Develop a whole-farm plan
2. Take inventory
3. Estimate crop production and livestock feed requirements
4. Estimate cash receipts from livestock
5. Estimate crop sales
6. Estimate other cash income
7. Estimate cash farm operating expenses
8. Estimate personal and non farm cash expenses
9. Estimate purchases and sales of capital assets
10. Find and record the scheduled principal and interest payments on existing debts
Uses for a Cash Flow Budget - correct answer ✔✔1. Plan borrowing and debt repayment
2. Suggest ways to minimize borrowing
3. Combine business and personal financial affairs into one complete plan
4. Help establish realistic line of credit
5. Plan purchases to obtain discounts
6. Aid tax planning
7. Find imbalances between current and concurrent debt
Cash Flow Budget - correct answer ✔✔A summary of all cash inflows and outflows for a given
future time period. No non cash entries are included. This budget can provide an estimate of
borrowing needs and repayment capacity. It can also be used to analyze the feasibility of
investment alternatives.
, 5 Sources of Risk and Uncertainty - correct answer ✔✔- production and technical risk
- price and market risk
- financial risk
- legal risk
- personal risk
Variability - correct answer ✔✔- range
- standard deviation
- coefficient of variation
- cumulative distribution function
Range - correct answer ✔✔- the range is the difference between the largest and the smallest
value
Standard Deviation - correct answer ✔✔- the standard deviation is the square root of the
variance
- to find the variance:
- subtract the mean from each observation and square the difference
- sum all these differences
- divide the number of observations minus one (N-1)
Coefficient of Variation - correct answer ✔✔- the coefficient of variation is the standard
deviation divided by the mean
- it is handy in comparing variability of outcomes with different means as it eliminates the units
- a coefficient of variation cannot be computed if the mean is O
