2007 Missouri FFA
Farm Management Contest
2007 DISTRICT FFA FARM MANAGEMENT CONTEST
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. There is only one correct
answer for each question. Choose the best answer and mark the
appropriate box on the score sheet provided.
1. The turnover ratio is calculated by dividing ________ by average
total assets.
A. total sales
B. beginning inventory
C. value of farm production
D. net farm income
E. None of the above
2. A farmer purchases 600-pound feeder steers for $1.10 per pound and
plans to sell the steers at 750 pounds. The farmer estimates the
total cost of gain to be 40 cents per pound. The nearest
breakeven price when the steers are sold at 750 pounds is
A. 73.75 cents/pound
B. 80.00 cents/pound
C. 81.25 cents/pound
D. 96.00 cents/pound
E. None of the above
3. How many total acres are included in the "S 1/2 of the NE 1/4 of
the SE 1/4 and the N 1/2 of the SE 1/4 of the SE 1/4 of Section
15, Twp. 10N, R4W of the 5th Principle Meridian"?
A. 40 acres
B. 80 acres
C. 120 acres
D. 160 acres
E. None of the above
4. 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
5. The net business profit for a year would be found on
A. the balance sheet.
B. the cash flow budget.
C. the income statement.
D. a partial budget.
E. None of the above
6. A producer is thinking about storing his corn in the local
elevator for 5 months. The price at harvest is $3.50 per bushel
and the elevator charges 2 cents per bushel per month for storage
plus a 4 cent per bushel handling charge. He has 5,000 bushels to
sell and would need to borrow $20,000 at 8% 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. $3.56
B. $3.64
C. $3.76
D. $3.86
E. None of the above
7. How many pounds of 48% protein soybean meal must be mixed with 12%
protein wheat to make a ton of 17% protein feed?
A. 278 pounds
B. 368 pounds
C. 439 pounds
D. 1,722 pounds
E. None of the above
8. A farmer began the year with an outstanding balance of $50,000 on
his operating loan and accrued interest of $3,000 on the loan.
The loan carries an interest rate of 8% on outstanding principal.
Six months later he makes a $3,000 payment on the loan. After
this payment he will have an accrued interest of
A. $0.
B. $500.
C. $1,000.
D. $2,000.
E. None of the above
9. A feedlot operator purchases a pen of 117 feeder steers with an
average weight of 780 pounds and sells them at an average weight
of 1081 pounds. Total feed cost for the pen is $25,356. Feed
cost per pound of gain is equal to
A. $0.440
B. $0.515
C. $0.720
D. $0.842
E. None of the above
10. A producer sells 12 feeder steers for $94/cwt. The average weight
per steer is 752 pounds. There is a 2% sales commission and
yardage fees of $2.10 per head. The net amount received for the
pen of steers would be
A. $7,049.62
B. $7,403.36
C. $8,287.71
D. $8,449.36
E. None of the above
11. If the interest rate is 8%, what is the present value of a dollar
to be received one year from now?
A. $0.826
B. $0.857
C. $0.926
D. $1.166
E. None of the above
12. On March 1, 2006, Anna borrowed $3,000 to buy bedding plants. On
October 1, 2006, she repaid the $3,000 along with $131.25
interest. What annual interest rate did she pay?
A. 6.0%
B. 6.5%
C. 7.0%
D. 7.5%
E. None of the above
13. In 2006, Paul Pigraiser had a net farm income of $40,000. Paul
had total business assets of $500,000 and total liabilities of
$250,000. Paul paid $20,000 in interest. Return on equity for
2006 would be
A. 10%
B. 12%
C. 16%
D. 22%
E. None of the above
14. You must use the mid-quarter convention of depreciation if more
than _____ percent of 3, 5, 7, 10, 15, and 20 year property is
acquired in the fourth quarter.
A. 33%
B. 40%
C. 50%
D. 65%
E. None of the above
15. All depreciable property purchased the same year that is within
the same property class must be depreciated using the same method.
This applies to all classes of depreciable property EXCEPT
A. 3 year property.
B. 10 year property.
C. 15 and 20 year property.
D. 27 1/2 and 39 year property.
E. None of the above
16. For tax year 2006, the social security wage base was
A. $94,200
B. $90,200
C. $87,900
D. $84,500
E. None of the above
17. If the price of a commodity increases by 10% and the quantity
purchased decreases by 5%, then the demand for this commodity is
A. upward sloping.
B. inelastic.
C. elastic.
D. unitary.
E. unstable.
18. The type of life insurance which provides protection for a limited
time and is usually cheaper per dollar of protection is called
A. whole life.
B. term.
C. endowment.
D. new life.
E. universal life.
19. The maximum Section 179 depreciation which can be claimed for tax
year 2006 is
A. $100,000
B. $102,000
C. $105,000
D. $108,000
E. None of the above
20. A trader with a long position in the futures market
A. profits when prices go down; loses when prices go up.
B. profits when prices go neither up nor down.
C. profits when prices go up; loses when prices go down.
D. cannot lose money.
E. None of the above
21. The main difference between a joint tenancy and tenancy in common
is
A. the surviving joint tenant will eventually own all of
the land as a result of right of survivorship.
B. the surviving tenant in common will eventually own all
the land as a result of right of survivorship.
C. only husbands and wives may be joint tenants.
D. tenants in common must own equal shares of the
property while joint tenants may own unequal shares
(i.e., H owns 1/4 and W owns 3/4).
E. None of the above
22. Increasing leverage during a period when a farm's percent return
to total capital is less than the interest rate will mean
A. higher returns to equity.
B. lower returns to equity.
C. lower risk.
D. lower gross income.
E. None of the above
23. A marketing function which tends to regulate the supply of a
product and provide a stable market price is
A. transporting.
B. processing.
C. grading.
D. storing.
E. None of the above
24. Which one of the following would cause an increase in the price of
an agricultural commodity?
A. An increase in supply and a decrease in demand
B. A decrease in supply with no change in demand
C. A decrease in demand with no change in supply
D. All of the above would cause price to increase
E. None of the above
25. A firm should shut down in the short run if it cannot cover its
A. fixed costs.
B. total costs.
C. variable costs.
D. time costs.
E. overhead costs.
26. Changes in price within a year which tend to follow the same
pattern over time are called
A. price cycle.
B. price seasonality.
C. price volatility.
D. price discrimination.
E. None of the above
27. If the price of a commodity is too high, the supply will be
greater than the demand resulting in a
A. surplus.
B. boycott.
C. monopoly.
D. shortage.
E. None of the above
28. A farmer who buys feeder pigs could use the options market to
reduce his price risk by
A. buying a hog Put option.
B. selling a hog Put option.
C. buying a hog Call option.
D. selling a hog Call option.
E. All of the above
29. Corn has an expected yield of 150 bushels per acre and a
production cost of $280.00 per acre. Expected market prices are
$3.50 per bushel for corn and $7.00 per bushel for soybeans.
Soybeans can be raised at a production cost of $150 per acre. At
what breakeven yield per acre would soybeans generate the same net
return per acre as corn?
A. 40.2 bushels
B. 48.1 bushels
C. 56.4 bushels
D. 58.1 bushels
E. None of the above
30. If high oil corn has the same production cost per acre as regular
corn but can be sold for 25 cents per bushel more, what yield of
high oil corn is needed to equal 125 bushels of regular corn at
$4.00 per bushel?
A. 109.1 bushels
B. 113.2 bushels
C. 117.6 bushels
D. 120.7 bushels
E. None of the above
31. A township is six miles square and includes
A. 6 sections.
B. 36 sections.
C. 40 sections.
D. 160 sections.
E. None of the above
32. If a farmer purchased land for $160,000, has a loan of $100,000
remaining on the land, and the market value of the land is
$200,000, the book value of the land on the balance sheet will be
A. $40,000.
B. $60,000.
C. $100,000.
D. $160,000 less any accumulated depreciation.
E. None of the above
33. The present value formula for estimating land prices (PV = annual
net returns divided by discount rate) assumes
A. future prices and yields can be estimated accurately.
B. the discount rate is appropriate.
C. income will continue to infinity.
D. net income will not trend up or down.
E. All of the above
34. A farmer is purchasing a new baler at a cost of $26,000. His
dealer will finance the baler under the following terms: 10% down
payment with the balance repaid in equal payments over the next 6
years at 7% APR. The farmer expects the baler to last for 8 years
and have a salvage value of $6,000. How much interest will the
farmer pay the first year of the loan?
A. $1,120
B. $1,400
C. $1,456
D. $1,638
E. None of the above
35. A constant payment loan with payments consisting of principal and
interest is called
A. an amortized loan.
B. a complementary loan.
C. a discounted loan.
D. a fixed rate loan.
E. a capital loan.
36. The "rule of 72" says to divide 72 by the annual interest rate to
estimate the number of years needed for an initial investment
earning that rate to double. How long would it take for $5
earning 6% a year to grow to $10?
A. 12 years
B. 24 years
C. 36 years
D. 48 years
E. None of the above
37. A charge for capital used in a farmer's cattle herd is usually
included in an enterprise budget regardless of whether he borrowed
money to buy the cows or not. This illustrates the principle of
A. marginal cost.
B. fixed cost.
C. opportunity cost.
D. variable cost.
E. alternative cost.
38. Net worth is a measure of
A. managerial ability.
B. financial position.
C. profitability.
D. liquidity.
E. All of the above
39. The main reason for hedging is
A. to make more profit.
B. to insure against a production loss.
C. to reduce the price risk associated with producing or
storing a cash commodity.
D. to take an opposite position from the speculator.
E. None of the above
40. Cooperatives pay patronage refunds according to
A. one man, one vote.
B. size of farm.
C. amount of business done by patron.
D. total assets.
E. All of the above
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2007 DISTRICT FFA FARM MANAGEMENT CONTEST
PROBLEMS SECTION
Choose the best answer and mark the corresponding numbered space on the
answer sheet. Computations may be done in the margins or on the back of
the paper. Each question is worth four (4) points. There is only one
correct answer for each question.
PROBLEM I - Market Value Balance Sheet
Using the information below, complete the net worth statement for
January 1, 2007:
Land . . . . . . . . . . . . . . . . . . . $750,000
House . . . . . . . . . . . . . . . . . . . 140,000
Machinery and equipment . . . . . . . . . . . . 85,000
Cows . . . . . . . . . . . . . . . . . . . 30,000
Calves . . . . . . . . . . . . . . . . . . . 15,000
Accounts payable . . . . . . . . . . . . . . . 4,200
Autos . . . . . . . . . . . . . . . . . . . . 32,000
Sows and boars . . . . . . . . . . . . . . . . 20,000
Feeder pigs . . . . . . . . . . . . . . . . . 11,000
Checking and savings . . . . . . . . . . . . . 12,250
Soybeans . . . . . . . . . . . . . . . . . . . 9,000
Hog buildings . . . . . . . . . . . . . . . . . 70,000
Feed and hay . . . . . . . . . . . . . . . . . 9,510
Accounts receivable . . . . . . . . . . . . . . 2,500
Accrued interest owed . . . . . . . . . . . . . 15,105
Accrued taxes owed . . . . . . . . . . . . . . 8,300
30-year land loan balance is $240,000.
$12,000 plus interest is due March 1 of each year.
5-year tractor loan balance is $14,460.
$4,820 plus interest is due August 31 of each year.
15-year home loan balance is $88,000.
$2,000 plus interest is due each quarter.
Current Assets: Current Liabilities:
________________________________ _________________________________
________________________________ _________________________________
________________________________ _________________________________
________________________________ _________________________________
________________________________ _________________________________
________________________________ _________________________________
________________________________ _________________________________
________________________________ _________________________________
Total _________________ 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, 2007, was
A. $59,260
B. $79,260
C. $109,260
D. $114,260
E. None of the above
2. The total value of non-current assets was
A. $607,295
B. $885,000
C. $1,127,000
D. $1,177,400
E. None of the above
3. The total value of current liabilities was
A. $19,320
B. $28,505
C. $47,825
D. $52,425
E. None of the above
4. The total value of non-current liabilities was
A. $259,640
B. $289,140
C. $299,640
D. $319,460
E. None of the above
5. The net worth was
A. $600,740
B. $816,195
C. $885,000
D. $944,260
E. None of the above
6. The current ratio was
A. 0.71
B. 0.81
C. 1.13
D. 1.41
E. None of the above
7. The debt to equity ratio was
A. 0.377
B. 0.453
C. 0.773
D. 1.769
E. None of the above
PROBLEM II -- Enterprise Budget
Use the following alfalfa budget to answer Questions 8 through 16.
ALFALFA HAY, irrigated, circular sprinkler, all equipment owned,
conventional bale
________________________________________________________________________
Operating Inputs Units Price Qty. Value
Establishment, prorate Ac 131.500 .200 $ 26.30
Insecticide Ac 13.500 1.660 22.41
Phosphorus (P205) Lbs 0.110 100.000 11.00
Rent fertilizer
spreader/ac. Ac 2.440 1.000 2.44
Baling wire Bale .120 195.000 23.40
Annual operating capital $ .107 11.054 1.18
Machinery labor Hr 6.000 3.215 19.29
Irrigation labor Hr 6.000 1.775 10.65
Mach fuel, lube, repair $ 39.56
Irrig fuel, lube, repair $ 131.67
Total operating costs $287.90
Fixed costs
Machinery: Amount Value
Interest at 10.675% 346.90 37.03
Depr., taxes, insurance 41.61
Irrigation equipment:
Interest at 10.675% 485.34 51.81
Depr., taxes, insurance 42.90
Total fixed costs $173.35
Production Units Price Quantity Value
Alfalfa hay Tons 80.00 6.50 $520.00
Total receipts $520.00
Returns above total operating costs $232.10
Returns above all specified costs $ 58.75
________________________________________________________________________
8. Total operating cost per acre is
A. $58.75
B. $173.35
C. $232.10
D. $287.90
E. None of the above
9. The return above total operating cost per acre is
A. $58.75
B. $173.35
C. $232.10
D. $287.90
E. None of the above
10. How many hours of labor are budgeted per acre?
A. 1.775
B. 3.215
C. 4.990
D. 6.000
E. None of the above
11. What is the average weight of the hay bales?
A. 50.0 pounds
B. 66.7 pounds
C. 75.0 pounds
D. 82.5 pounds
E. None of the above
12. What is the total budgeted interest cost per acre?
A. $37.03
B. $51.81
C. $88.84
D. $90.02
E. None of the above
13. How many tons of hay are produced in a 40-acre field?
A. 40
B. 80
C. 260
D. 520
E. None of the above
14. What was the cost per acre to establish the stand of alfalfa?
A. $26.30
B. $131.50
C. $287.90
D. Not enough information given
E. None of the above
Some adjustments need to be made to the budget. Labor costs are too low
and there is no charge for land use.
15. If labor costs $9 per hour, how much will per acre costs increase?
(Ignore changes in operating capital.)
A. $9.00
B. $9.56
C. $14.97
D. $44.91
E. None of the above
16. If the land is rented for $40 per acre and labor is $9 per hour,
what will be the expected per acre return over all budgeted costs?
(ignore changes in capital costs.)
A. $3.78
B. $6.17
C. $18.75
D. $43.78
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 15, 2006, Steve bought a new tractor. Steve traded his old
tractor which had a remaining book value of $2,610. Steve paid $10,000
"down" and financed the remaining $25,000 over 5 years at 8% interest.
He elected to roll the remaining basis of his old tractor into the new
one.
17. The tractor is
A. 3-year property
B. 5-year property
C. 7-year property
D. 10-year property
E. None of the above
18. If Steve does not expense any of the cost of the tractor, then
2006 depreciation will be (use regular MACRS and mid-year
convention)
A. $1,351.04
B. $4,029.54
C. $10,714.00
D. $12,065.04
E. None of the above
19. If Steve expenses $10,000 of the tractor cost and uses the mid-
quarter convention and regular MACRS, then 1/1/07 remaining book
value will be
A. $17,895.55
B. $20,160.29
C. $23,912.19
D. $27,610.00
E. None of the above
20. If Steve expenses the maximum allowable on the tractor and uses
regular MACRS with the mid-year convention, then 1/1/07 remaining
book value will be
A. $0
B. $2,330.36
C. $13,147,52
D. $24,651.86
E. None of the above
21. If Steve does not claim an expense deduction and uses the mid-year
convention and straight line depreciation over the alternate MACRS
life, his 2006 depreciation will be
A. $630.50
B. $1,880.50
C. $5,000.00
D. $5,630.50
E. None of the above
22. Under MACRS, a computer is classified as
A. 3-year property
B. 5-year property
C. 7-year property
D. not depreciable
E. None of the above
PROBLEM IV -- Supply and Demand
2007 District FFA Farm Management Graph for Exam
The above graph represents the supply of cotton (S), the demand for
cotton in the U.S. (DUS), the demand for cotton for export (DF), and the
total demand for cotton (DT.
23. What is the market equilibrium price of cotton 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 cotton will be used in
the U.S.?
A. Q1
B. Q2
C. Q3
D. Q4
E. Q5
25. At the market equilibrium price, how much cotton will be exported?
A. Q1
B. Q2
C. Q3
D. Q4
E. Q5
26. Without foreign demand, the equilibrium price of cotton would be
A. P1
B. P2
C. P3
D. P4
E. P5
For Questions 27 and 28, include foreign demand and assume new high-
yielding cotton varieties cause the supply to increase from S to S1
27. The increased supply of cotton should cause cotton demand to
A. shift to the left and up.
B. shift to the right and down.
C. not change.
D. None of the above
28. Higher cotton yields would cause
A. exports of cotton to go up.
B. the equilibrium price of cotton to go down.
C. Both of the above
D. the foreign demand for cotton to shift left.
E. None of the above
PROBLEM V - Marketing
On January 12, a farmer puts 100 head of steers on feed. He sells them
as slaughter cattle on June 5. Ignore commissions, and interest.
January 12 quotes: June 5 quotes:
June futures price = $86.50 June futures price = $80.10
Expected basis = $1.00 under the board Basis = $0.80 under the board
Strike --- Premiums --- --- Premiums ---
price Call Put Call Put
$81.00 $6.05 $0.55 $1.40 $1.21
$83.00 $4.35 $1.15 $0.50 $2.62
$85.00 $3.10 $1.85 $0.25 $4.50
$87.00 $2.10 $2.75 $0.05 $6.11
$89.00 $1.37 $4.00 $0.02 $7.95
29. What is the cash price of slaughter cattle on June 5?
A. $79.30
B. $80.10
C. $85.90
D. $91.00
E. None of the above
30. If the farmer sold a futures contract on January 12 and bought
back the contract on June 5, what would be the realized price per
hundredweight (cash + net on futures) for these steers?
A. $79.30
B. $81.70
C. $83.50
D. $85.70
E. None of the above
31. If the farmer bought a $85.00 Put on January 12 and sold the Put
on June 5, what would be the realized price per hundredweight
(cash + net on options) for his steers?
A. $76.65
B. $81.95
C. $83.50
D. $85.70
E. None of the above
32. If the farmer bought a $85.00 Put and sold a $85.00 Call on
January 12, and sold the Put and bought back the Call on June 5,
what would be the realized price per cwt. (cash + net on options)
for his steers?
A. $77.30
B. $79.00
C. $83.25
D. $84.80
E. None of the above
33. Given all the information in Problem V, which of the following
actions taken on January 12 turned out to be the most profitable?
A. Selling a futures contract.
B. Buying a $85 Put option.
C. Buying a $85 Put and selling a $85 Call.
D. Taking no market action.
PROBLEM VI - Time Value of Money
Use the following information to answer Questions 34-40.
Present Future Present
Value of Value of Value of
N $1 $1 Annuity
1 0.9346 1.0700 0.9346
2 0.8734 1.1449 1.8080
3 0.8163 1.2250 2.6243
4 0.7629 1.3108 3.3872
5 0.7130 1.4026 4.1002
6 0.6663 1.5007 4.7665
34. A dollar invested for 5 years will be worth
A. 24.39 cents.
B. 71.30 cents.
C. $1.40.
D. $4.10.
E. None of the above
35. A field of alfalfa will produce $1,000 during the first year,
$4,000 during each of the next 4 years and $2,000 in the sixth
year. What is the present value of this income stream?
A. $14,453.50
B. $14,929.60
C. $15,595.90
D. $18,157.10
E. None of the above
36. A beef cow produces after-tax returns at the end of the year of
$60/year for 5 years and can be sold for $400 after-tax at the end
of the fifth year. Assume the above table uses the appropriate
discount rate and determine the current value of the cow.
A. $468.20
B. $477.77
C. $495.56
D. $531.21
E. None of the above
37. With one year of income remaining in the beef cow in the question
above, how much should she be worth using the above table?
A. $383.19
B. $396.72
C. $429.92
D. $470.00
E. None of the above
38. If the farmer expects interest rates to increase, but no change in
net returns to cattle, what impact is this likely to have on the
present value of the beef cow?
A. Decrease the present value
B. Increase the present value
C. Would not change the present value
D. Cannot tell
39. What is the annual payment on a $25,000 loan amortized over 6
years?
A. $4,166.67
B. $5,244.94
C. $5,407.86
D. $6,097.26
E. None of the above
40. What discount rate is used in the above table?
A. 7.0%
B. 8.4%
C. 9.5%
D. 10.8%
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.
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KEY
2007 DISTRICT FFA FARM MANAGEMENT CONTEST
Multiple Choice
1. C 11. C 21. A 31. B
2. D 12. D 22. B 32. D
3. A 13. C 23. D 33. E
4. A 14. B 24. B 34. D
5. C 15. D 25. C 35. A
6. C 16. A 26. B 36. A
7. A 17. B 27. A 37. C
8. D 18. B 28. A 38. B
9. C 19. D 29. C 39. C
10. C 20. C 30. C 40. C
Problems
1. A 11. B 21. B 31. B
2. C 12. D 22. B 32. D
3. D 13. C 23. D 33. A
4. E 14. B 24. B 34. C
5. B 15. C 25. A 35. B
6. C 16. A 26. B 36. D
7. B 17. C 27. C 37. C
8. D 18. B 28. C 38. A
9. C 19. C 29. A 39. B
10. C 20. B 30. D 40. A