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Question 10
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((a) (i) State the law of diminishing returns. [2 marks]
(ii) Explain the main cause of diminishing returns in agricultural
production. [2 marks]
(b) A commercial farmer bought a second hand combine harvester for
NI00,000.00 in 1990, and sold if for N 30,000.00 in 2000. For the combine
harvester, calculate the
(i) salvage value; [ 1 mark]
(ii) total depreciation; [2 marks]
(iii) annual depreciation. [2 marks]
( c) List seven problems of agricultural extension services in West Africa. [7 marks]
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This question was fairly attempted. In question 10(a)(i & ii), many candidates were able to state
the law of diminishing returns and explain the main cause of diminishing returns in agricultural
production. However, majority of the candidates could not calculate the salvage value, total
depreciation and annual depreciation of a second hand combine harvester as demanded in
question 10(b)(i-iii). In question 1O(c), many candidates were able to list the problems of
agricultural extension services in West Africa.
The expected answers include:
Calculation of salvage value, total depreciation and annual depreciation of the combine harvester
Salvage value
+ #30,000.00
Total Depreciation
Cost price - Salvage value
= #100,000.00 = #30,000.00
= #70,000.00
Annual depreciation
= Cost price - Salvage value
Useful life in years
= #100,000.00 - #30,000.00
10 years
= #70,000.00
10 years
= #7,000.00 |
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