Waec Model Questions Vol1 2021 Commerce Question 19

Practice objective / multiple choice question 19 from the 2021 Waec Model Questions Vol1 Commerce examination.

Waec Model Questions Vol1 2021 Commerce Objective / Multiple Choice Hard Difficulty
Question 19 WAEC_MODEL_QUESTIONS_VOL1 • 2021 • COMMERCE • objective

A consumer buys a washing machine for ₦120,000 with a 2‑year warranty covering defects. After 18 months the machine fails. The consumer can either (A) have the seller repair it at a cost of ₦8,000, which will take 3 months, or (B) return the machine for a refund. The refund amount is reduced by depreciation: the machine loses 20% of its value each year (assume linear depreciation). In addition, the consumer loses ₦5,000 per month of downtime. Which option gives the greater net monetary benefit? Compute the net benefit for each option and state the preferred choice.

Answer Options

A. Repair option is better; net benefit = ₦90,000 versus a loss of ₦10,000 for refund.
B. Refund option is better; net benefit = ₦84,000 versus a loss of ₦25,000 for repair.
Correct Answer C. Refund option is better; net benefit = ₦84,000 versus a loss of ₦23,000 for repair.
D. Refund option is better; net benefit = ₦70,000 versus a loss of ₦30,000 for repair.
Correct Answer
C
Correct Option:
Refund option is better; net benefit = ₦84,000 versus a loss of ₦23,000 for repair.

About This Question

This is Waec Model Questions Vol1 2021 Commerce Question 19. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

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