POST UTME ABU 2018 Commerce | Objective
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Question 1
A company has a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. If the company issues 20,000 shares at a premium of ₦5 per share, what is the total amount received from the issue of shares?
Question 2
A consumer has a budget of ₦1000 and faces the following price schedule: x = 10 + 2y. If the consumer's utility function is given by U(x,y) = 2x + 3y, find the consumer's optimal consumption bundle.
Question 3
A company is considering introducing a new product line. What is the main advantage of using a market research report to inform the decision?
Question 4
In a perfectly competitive market, the law of supply states that as the price of a good increases, the quantity supplied of that good will also increase. However, this is not always the case. What is the name of the phenomenon that occurs when the quantity supplied of a good decreases as the price of that good increases?
Question 5
A firm is considering investing in a new project that has a 30% chance of generating a return of ₦2,000,000, and a 70% chance of generating a return of ₦0. If the firm's cost of capital is 12%, what is the expected return on investment (ROI) for this project?
Question 6
A company is considering two marketing strategies for its new product. Strategy A involves a high initial investment in advertising, but the product is expected to have a long shelf life and low maintenance costs. Strategy B involves a lower initial investment in advertising, but the product has a shorter shelf life and higher maintenance costs. Which strategy is more likely to result in higher profits?
Question 7
A firm's demand function is given by Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm's price is ₦20, what is the quantity demanded?
Question 8
A company has a policy of paying its employees a fixed salary of ₦50,000 per month, plus a commission of 10% on sales. If the employee's sales for the month were ₦500,000, what is the employee's total earnings for the month?
Question 9
A company is considering two different marketing strategies for its new product. Strategy A involves a high upfront cost of ₦1,000,000, but is expected to generate ₦2,500,000 in revenue over the next year. Strategy B involves a lower upfront cost of ₦500,000, but is expected to generate ₦1,500,000 in revenue over the next year. Assuming a 10% discount rate, which strategy is more profitable?
Question 10
A firm is producing a good with the following cost function: C(q) = 2q^2 + 10q + 100. If the firm is currently producing 10 units of the good, what is the marginal cost of producing the 11th unit?
Question 11
A marketing manager wants to increase sales by 20% within the next quarter. If the current sales are ₦1,000,000, what is the target sales figure?
Question 12
A company has a production capacity of 100 units per day. If the demand for the product is 120 units per day, what is the level of excess demand?
Question 13
A country is experiencing a trade deficit of ₦500 billion. If the country's GDP is ₦10 trillion, what is the trade deficit as a percentage of GDP?
Question 14
A company is considering two different production strategies for its new product. Strategy A involves a high upfront cost of ₦1,500,000, but is expected to generate ₦3,000,000 in revenue over the next year. Strategy B involves a lower upfront cost of ₦1,000,000, but is expected to generate ₦2,000,000 in revenue over the next year. Assuming a 10% discount rate, which strategy is more profitable?
Question 15
A company uses the following data to calculate its weighted average cost of capital (WACC): Debt: 40%, Equity: 60%, Cost of debt: 10%, Cost of equity: 15%. What is the WACC?
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