Agricultural Finance Principles: Capital Management, Business Planning and Loan Structure

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Finance - Personal Finance

michael1tekrzp Created by 10 mon ago

Cards in this deck(22)

What is agricultural finance? It involves managerial decisions on acquiring and using _____ resources to grow and protect equity capital.

What are the four key financial statements and how are they connected to one another? They include the Income statement, Balance sheet, statement of cash flow, and statement of _____ equity.

Business plans have three parts: Production, Finance, and _____.

An optimal loan program is preferred by borrowers when there is a maturity structure of debt that matches the length of the _____ period of the asset being financed.

A self-liquidating loan requires that the asset or project being financed generates more cash returns over its life than the size of the loan plus the _____ obligation.

A standard operating loan involves a separate borrowing transaction where the purpose, size, interest rate, and repayment date are _____ upon.

A nonrevolving line of credit is based on a cash flow budget where money is dispensed as outlined, and repayment occurs when inflows are greater than _____.

A revolving line of credit involves a maximum line of credit agreed upon for the next planning period, typically for producers with accurate and reliable _____ budgets.

Repayment plans for noncurrent assets are generally based on installment loans that are amortized with regularly scheduled payments. One alternative payment schedule is the _____ Payment, where total payment remains constant.

The time value of money concept states that the sooner a dollar is available, the greater its value. Compounding determines the future value of cash flows, while _____ determines the present value.

A sinking fund is used to find what sum of money needs to be deposited regularly at the end of each period, compounded at a given rate, to equal a specified _____ value.

Present Value (PV) refers to the number of dollars available or invested at the current time or the current value of some amount to be received in the _____.

Future Value (FV) is the amount to be received at some future time or the amount a present value will be worth at a future date when invested at a given _____ rate.

Payment (PMT) refers to the number of dollars to be paid or received in a _____ period.

The interest rate, also called the discount rate, is used to find present and future values and is often equal to the opportunity cost of _____.

The time period (n) is the number of time periods used to compute present and future _____.

An annuity is a term used to describe a series of periodic _____.

Simple interest means that only the original principal, or amount of money, earns interest over the life of the _____.

Compound interest means that each time interest is paid, it is added to or compounded into the _____.

Investment analysis, also called capital budgeting, involves determining the profitability of an investment by considering factors like initial cost, net cash revenues, terminal value, and _____ rate.

The four methods to analyze and compare investments include the payback period, simple rate of return, net present value, and internal rate of _____.

Sensitivity analysis is a process of asking several 'what if' _____ to evaluate different scenarios.

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Agricultural Finance Principles: Capital Management, Business Planning and Loan Structure

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