Waec Model Questions Vol1 2021 Agricultural Science Question 43
Practice objective / multiple choice question 43 from the 2021 Waec Model Questions Vol1 Agricultural Science examination.
A farmer is evaluating a cash‑crop on a 1‑hectare field. Fixed cost = ₦150,000. Variable cost = ₦45,000 per ha under normal conditions. Expected yield = 3.5 t/ha and market price = ₦120,000 per tonne. There is a 10 % chance of a pest outbreak that reduces yield by 40 % and raises variable cost by ₦15,000 per ha. The farmer discounts cash flows at 12 % per annum and harvest occurs after one year. Calculate the expected net present value (NPV) per hectare and state whether the crop is financially viable (NPV > 0).
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About This Question
This is Waec Model Questions Vol1 2021 Agricultural Science Question 43. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Agricultural Science examination.
Difficulty level: Hard .
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