Name_____________________________________ID#_____________Section___________Agricultural Economics 330Fall 2006Exam III1. Why is it important for the owners of a closely held business to have abuy-sell agreement agreed to and signed by each of the owners and theirspouses? (6 points)2. In both the lecture on attributes of top managers and the lecture oncharacteristics of successful family businesses, I talked about theimportance of communications. What are several things thatmanagement could do to reduce communications problems? (10 points)3. Commercial agricultural loan requests are increasingly being treated likeany other business loan. For their own sake as well as their lenders,what are the 12 questions a farmer should be prepared to answer beforemaking a loan request? (18 points)4. When evaluating credit requests from commercial agricultural producers,lenders organize their analysis around 5 credit factors. What are thosefactors? Just identify, you don’t need to describe. (10 points)5. What are at least 2 reasons why an investor in a closely held businessmight prefer convertible debt over either common or preferred stock? (6points)6. Many farmers and ranchers are pursuing value added businessopportunities to try and increase their income. However, more of theseefforts fail than succeed because they often overlook several criticalissues when they develop their business plan. Please discuss some ofthe more important things that many producers have failed to address.(15 points).7. The following are 3 qualities of successful family businesses. Describesome of the attributes associated with each of these qualities. (15 points)a. Shared vision, values and goals; and a well formulated strategic plan.b. Clear procedures and expectations regarding family participation in thebusiness.c. Guidelines and plans for management succession and businesscontinuity.8. I discussed 16 management attributes of top farm executives. Thesewere covered in more detail in the article “25 Attributes of the 21stCentury Farm Executive.” Describe the following 10 attributes. (20points)a. They are strategic thinkers.b. They have the ability to objectively assess strengths and weaknesses inpeople, including themselves. c. They operate in a continuous improvement mode. d. They spend more time thinking about “what if” scenarios and developingcontingency planse. They see change and challenges as opportunities and don’t tend to viewthemselves as victimsf. Their approach to management is more balanced across key performanceareasg. They are excellent problem solversh. They anticipate and adapt to the changing needs of their marketsI. They are more likely to seek input and expertise from outside thebusiness.j. They spend more time on monitoring and analyzing