In a Reuters News Report Dated February 3, 2010, President

question 90

Multiple Choice

In a Reuters news report dated February 3, 2010, President Obama is quoted as saying, "By 2022 we will more than double the amount of biofuels we produce to 36 billion gallons, which will decrease our dependence on foreign oil by hundreds of millions of barrels per year." Use the following information to estimate the fraction of farmland in the United States that will be needed to meet this target in order to assess the impact on other uses of farmland, such as the production of food. (M  mega  10⁶)
Farmland in the U.S.  1.4 square miles
Energy density of biofuels  100 MJ/gal
Annual biofuel production from farmland  1,000 gal/acre
640 acres  1 square mile
1 gal  3.785 L
Mass density of biofuels: 800 g/L

• A)0.4%
• B)1.0%
• C)4.0%
• D)10%
• E)40%

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Definitions:

Vertical Analysis

A technique for examining financial statements by presenting each item in the main categories of accounts (assets, liabilities, and equity) on a balance sheet as a fraction of the overall category.

Balance Sheet Data

Information related to the assets, liabilities, and stockholders' equity of a company as presented in its balance sheet at a specific date.

Current Ratio

An indicator of a business's capability to cover its obligations due in less than a year, determined by dividing the total of current assets by the total of current liabilities.

Marketable Securities

Financial instruments that can be easily converted to cash, such as stocks or bonds.