Economics Question

Answer the following questions and submit to Chapter 7 Questions.

1. What are futures markets? Why are futures market prices great forecasts of cash prices many months from now.

2. Why do the cash and futures prices move in tandem and grow smaller as you get closer to the delivery date on a futures contract?

3. How is forward contracting different from hedging?

4. Why is it important to remove the effects of inflation, population, and other factors from a forecast?

5. What is extrapolation forecasting? How does it differ from a price index?

6. Using the Extrapolation Method, determine what the forecast of corn production be will for six months from today if:

· the price of corn rose by 3% over the last 6 months

· the price of corn today is $99.00 per m3

 

 

7. Using the Graphical Analysis, determine what the forecast of corn production be in January if:

 

 

8. By Adjusting for Inflation, determine what the forecast of corn production be will for six months from today if:

Date Price Price Index Real Price = (Price/price index )*100
Year 1 $40 99  
Year 2 $55 102  
Year 3 $48 112  
Year 4 $68 127  
Year 5 $55 135  
Year 6 $65 131  
Year 7 $62 141  
Year 8 $95 145  
Year 9 $87 152  
Year 10 $99 150  

 

9. Compare the usefulness of cross-sectional data to time-series data in making management decisions about how much to produce.

 

10. Using the information found at the USDA Economic Research Service “Farm Sector Income Forecast” (https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/farm-sector-income-forecast/), critique the current farm sector income forecast. Do you expect these trends to continue?

Answer the following questions and submit to Chapter 8 Questions.

1. Explain how a firm’s financial objectives influence the development of its marketing plan.

2. Identify and define the three main types of budgets. Explain how they are related to each other.

3. Explain why the cash flow and capital budgets will give you different perspectives on the business.

4. If the success of a business rests heavily on meeting customer’s needs, why is so much concern focused on financial objectives and budgeting?

5. Explain the business adage that budgets are useless, but budgeting is priceless. Give an example that supports your answer.

6. Evaluate the statement that good budgets do not take the place of good management.

7. Explain what is happening at each step in the cash cycle given in Figure 8-1. Start and end your discussion with cash.

8. Explain how budgeting assists the firm in achieving its goal of maximizing long-run profits.

9. In addition to measuring a firm’s achievement of its financial performance goals, how else can you measure the success of a business?

10. Use the following information to complete the cash flow budget given here:

a. Inventory turnover ratio = 12

b. Cost of goods = 50% of sales

c. Accounts payable turnover ratio = 12

d. Accounts receivable ratio = 12

e. Sales = half cash, half credit

f. Minimum cash balance = $100,000

g. September projected sales = $700,000

h. October projected sales = $800,000

i. May projected sales = $200,000

ITEM JUNE JULY AUGUST
PROJECTED SALES $160,000 $192,000 $320,000
PURCHASES      
PAY ACCOUNTS PAYABLE $134,400    
PAY OVERHEAD $45,000 $45,000 $45,000
TOTAL CASH OUTFLOW      
PROJECTED SALES $160,000 $192,000 $320,000
CASH SALES      
COLLECT ACCOUNTS RECEIVABLE $30,000    
TOTAL CASH INFLOW      
BEGINNING CASH BALANCE $200,000    
CASH INFLOW      
TOTAL CASH AVAILABLE      
CASH OUTFLOW      
NET CASH      
NEEDED BORROWINGS/REPAYMENTS      
ENDING CASH BALANACE      
CUMULATIVE BORROWINGS  

Answer the following questions and submit to Chapters 9&10 Questions.

1. What defines a critical task in a business? How does top management find the critical tasks in their businesses? What part do they play in the success of the organization?

2. Compare and contrast three ways to organize a business. List two advantages and disadvantages of each. Describe selection criteria for choosing the best organizational design.

3. What is the difference between line and staff activities? Give an example of each. In a flat world where profit margins are growing thinner and more and more data resides on cyber clouds, is it better to be a line or staff worker?

4. Describe a situation where you would want to use centralized decision making. Describe a situation where decentralized decision making would be best. What makes the organizational scheme used in both cases the best decision?

5. Identify and explain the types of decisions that must be made by top management for an agribusiness to prosper.

6. How do you determine which organizational structure is best for your business?

7. Explain how the organizing and planning business management functions can combine to make a business successful.

8. Identify and describe the factors that would cause a firm to change its organizational structure as it grows larger.

9. Why do successful firms give those employees that deal directly with customers the widest authority to solve their problems without consulting higher levels of management?

10. What is the ultimate criterion when deciding on the best organizational scheme for an agribusiness firm?