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Question one In terms of performance criteria, distinguish farm income analysis from funds flow analysis from...

Question one

  1. In terms of performance criteria, distinguish farm income analysis from funds flow analysis from farm investment analysis.                                 3 marks
  2. How is the partial budgeting technique employed to analyse the performance of a project?                                                                                                            3 marks
  3. In analysis of agricultural projects, Elucidate on the six major objectives of financial analysis                                                                                                3 marks
  4. What constitutes farm resource use in farm investment analysis?     2 marks
  5. Distinguish accrual accounting from cash accounting                          4 marks

Question two

(b)      Outline any three information sources for market prices available to a project manager especially for agricultural based commodities.               3 marks

  1. Describe each of the following terms
  1. Marginal Value Product (MVP)                                                      2marks
  2. Opportunity cost                                                                               2 marks

(c)        What is an export parity price? Give an export parity price for a specified commodity. (Starting with the fob price)

Solutions

Expert Solution

a) FARM INCOME:

FARM INCOME REFERS TO PROFITS AND LOSSES THAT ARE INCURRED THROUGH THE OPERATION OF A FARM OR AGRICULTURAL BUSINESS.

FUND FLOW ANALYSIS:

FUND FLOW ANALYSIS IS THE ANALYSIS OF FLOW OF FUND FROM CURRENT ASSET TO FIXED ASSET OR CURRENT ASSET TO LONG TERM LIABILITIES OR VICE-VERSA.

FARM INVESTMENT ANALYSIS:

FARMLAND INVESTMENT ANALYSIS HELPS BUYERS DETERMINE THE WORTH OF PARTICULAR FARMS.

b) PARTIAL BUDGET TECHNIQUE COMPRISING DOMINANCE AND MARGINAL ANALYSIS IS A POWERFUL TOOL IN FINDING OUT EITHER ONE OR TWO MOST PROFITABLE ENTERPRISE(S) AMONG THE DIFFERENT ENTERPRISES.

c) 1. PROJECT GOAL

2. PROJECT OUTPUTS

3. PROJECT INPUTS

4.AGENCY OUTCOME

5.TASKS

6.RISK MINIMIZATION.

d) THREE RESOURCES PROVIDED TO US FOR FREE: SUNSHINE, WIND, PRECIPITATION.   THREE RESOURCES WE HAVE AVAILABLE TO INVEST: LABOR, TIME, WEALTH AND EVERYTHING ELSE CAN BE BORROWED , BOUGHT OR RENTED.

ekkarill92 answered 2 years ago
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