20 Questions
What is the primary task of financial management in a farming enterprise?
Acquisition of funds (capital)
Why is agricultural financing considered highly risky?
Variable climatic conditions leading to unstable production
What factor makes it difficult for farmers to adapt to changes in demand?
Inability to quickly expand production due to biological factors
Why is land considered the most important capital asset in agriculture?
Land serves as a means of investment and production
In agriculture, why are movable assets considered challenging for financing institutions?
Mobile and difficult to identify, often handled by unskilled employees
Why do numerous small production units pose a challenge for credit providers in agriculture?
Large number of small enterprises necessitate special arrangements from credit providers
What is the key importance of farmer's integrity and management skills in agricultural financing?
They are important factors when movable assets serve as security for financing
Why do structural shortcomings in agriculture present economic challenges?
'Uneconomic units' are much higher in certain regions
'Seasonal nature of products' in agriculture implies what kind of transactions?
'Sporadic and seasonal' transactions
'Movable assets and products nondurable and dispersed' refers to their characteristics being:
'Mobile and difficult to identify'
What is the primary reason for needing fixed capital in farming?
To guard against exhausting of land
Which of the following is a characteristic of movable capital in agriculture?
Converted quickly to money
Why is the need for operating capital in farming considered extremely risky?
Lack of available credit facilities
What defines the temporary requirements of capital in farming enterprises?
Caused by varying conditions
How does the size of the farming enterprise influence the extent of capital requirements?
Optimal asset usage is less important for large enterprises
Which factor significantly affects the capital requirements in different production branches within the same region?
Differences in soil types
In farming, what is considered as 'own capital'?
Profits from farm operations after expenses
What is the primary reason for needing operational (working) capital in agriculture?
To manage current assets like production stocks and debtors
'Permanent requirements' of capital in farming are primarily aimed at ensuring:
Production capacity through investment in fixed and movable assets
What distinguishes 'loan capital' from 'own capital' in farming enterprises?
Loan capital is provided by external sources and incurs debt.
Test your knowledge on the nature of capital requirements in agriculture, including the need for fixed and movable capital. Explore the importance of fixed assets like dams, watering places, and sheds in farming operations.
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