f) Define the following economic terms, giving suitable examples from agribusiness:- (2 marks) i) Social costs (2 marks) ii) Organizing iii) Curren: liabilities (2 marks) iv) Non-operating revenue (2 marks) b) Explain how formal education affects agribusiness management process (5 marks) c) Explain the requisites of a successful agribusiness (8 marks) d) Explain why an agribusiness manager should have knowledge of the following: (3 marks) i) Gross working capital ii) Temporary working capital (3 marks) e) An investor is considering two independent projects Each project costs Kshs 10,000 Pro A produces cash inflows of Kshs.3,000 a year for four years. Project B produces no cash flows for the first two years and Kshs.6,000 a year for the following two years. If the in wants to recoup his money within 3 years should the investor accept those projects?E your answer. 7m "An agribusiness is a social institution". Do you agree or disagree?Explain briefly.

Question

f) Define the following economic terms, giving suitable examples from agribusiness:- (2 marks) i) Social costs (2 marks) ii) Organizing iii) Curren: liabilities (2 marks) iv) Non-operating revenue (2 marks) b) Explain how formal education affects agribusiness management process (5 marks) c) Explain the requisites of a successful agribusiness (8 marks) d) Explain why an agribusiness manager should have knowledge of the following: (3 marks) i) Gross working capital ii) Temporary working capital (3 marks) e) An investor is considering two independent projects Each project costs Kshs 10,000 Pro A produces cash inflows of Kshs.3,000 a year for four years. Project B produces no cash flows for the first two years and Kshs.6,000 a year for the following two years. If the in wants to recoup his money within 3 years should the investor accept those projects?E your answer. 7m "An agribusiness is a social institution". Do you agree or disagree?Explain briefly.

Answer 1

f) i) Social costs: Social costs refer to the indirect costs associated with an economic activity that affect society as a whole. In agribusiness, social costs could include the environmental impact of farming practices, such as soil degradation or water pollution, which affect the community and natural resources.ii) Organizing: Organizing in agribusiness involves structuring and coordinating various activities and resources within the business to achieve its goals. This includes managing personnel, establishing processes, and allocating resources efficiently.iii) Current liabilities: Current liabilities are obligations that a business needs to settle within a year. In agribusiness, current liabilities might include short-term loans, accounts payable to suppliers, or wages owed to workers.iv) Non-operating revenue: Non-operating revenue refers to income generated from activities that are not part of the core business operations. In agribusiness, this could be rental income from land owned by the agribusiness or profits from selling equipment.b) Formal education affects the agribusiness management process by providing individuals with theoretical knowledge and practical skills necessary for effective management. It equips individuals with an understanding of business principles, financial management, marketing, and production techniques, which are crucial for making informed decisions and achieving the goals of the agribusiness.c) The requisites of a successful agribusiness include a clear business plan, access to sufficient capital, a skilled workforce, effective marketing strategies, adherence to regulations and standards, and the ability to adapt to market changes and technological advancements.d) i) An agribusiness manager should have knowledge of gross working capital to understand the total resources available for day-to-day operations and to manage liquidity effectively.ii) Temporary working capital is essential for managing short-term financial needs and ensuring that the business can meet its immediate obligations without compromising long-term stability.e) The investor should accept Project A because it generates cash inflows within three years, allowing the investor to recoup their investment. Project B, on the other hand, does not produce any cash flows for the first two years, making it unsuitable for the investor's requirement of recouping their money within three years."An agribusiness is a social institution." I agree. Agribusiness is a social institution because it plays a crucial role in society by providing food, employment, and contributing to the economy. It also involves interactions with various stakeholders, including farmers, consumers, and policymakers, making it an integral part of the social fabric.

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