Review Notes
AGEC 325
Spring 2009
EXAM 2 – Wed April 15
10 Enterprise budgeting
1. What an enterprise budget is and
purposes for which it may be used
2. Parts and structure
3. Know how to do break-even analysis
from an enterprise budget
4. Know how to use budgets to estimate
maximum land rents, and “returns to ----”
and “returns over ---”
11 Partial budgeting
1. What it is and purposes for which it is
used
2. Components, organization, and
structure
3. Be able to develop one for a simple
problem
13 Cash flow budgeting
1. What it is
2. What it is used for
3. Structure
14 Forms of business organization
A. Forms of business organization
For each know something about the
following:
1. Organization and characteristics
2. Advantages
3. Disadvantages
17 Investment analysis
1. Know the definitions, uses, and how to
determine or calculate:
Present value, Net present value, Internal
rate of return, Discount rate, Financial
feasibility, Economic feasibility
2. Know the role of time value, inflation,
and risk in determining an appropriate
discount rate.
Chapter 19 Chapter
Capital and
19 the Use
ofCapital
Credit and the Use of Credit
– What is capital and what are its sources? What are th
– What is capital and what are its sources? What are
their relative importance?
– What is credit?
– Know what the cost of capital is
– Know how to decide how much capital to use
– Know what leverage is, how it is measured and what
circumstances favor being highly leveraged.
– Know how to describe advantages /disadvantages of
different types of loans by length, use, security and
repayment plan
– Know the sources of loan funds and their relative
importance for different types of loans Know what the
cost of capital is
– Know how to decide how much capital to use
Chapter 20 Land -- Control and
Chapter 20 Land –
Control and Use Use
– Be able to explain important factors in land
purchase decisions, methods of land valuation,
and the legal aspects of a land purchase
– Know the advantages and disadvantages of
ownership, cash leasing and share leasing
– Be able to demonstrate how an equitable share
leasing arrangement can be developed