POST UTME CHRISTOPHER UNIVERSITY 2025 Commerce | Objective

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Question 1
A sole trader's business is not registered with the Corporate Affairs Commission (CAC). What is the legal implication of this?
A. The sole trader is exempt from paying taxes.
B. The sole trader is not liable for any business debts.
Correct C. The sole trader's business is not recognized by law.
D. The sole trader is not required to keep business records.

Correct Answer: C

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Question 2
A company has a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. If the company issues 50,000 shares at a premium of ₦5 per share, what is the total amount received from the issue of shares?
A. ₦500,000
B. ₦750,000
C. ₦1,000,000
Correct D. ₦1,250,000

Correct Answer: D

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Question 3
A consumer purchases a product for ₦10,000. If the product is defective and the consumer returns it, what is the consumer entitled to under the Consumer Protection Act?
Correct A. A full refund of ₦10,000
B. A partial refund of ₦5,000
C. A replacement product of the same value
D. No refund or replacement

Correct Answer: A

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Question 4
A company has a bank overdraft facility of ₦500,000. If the company's current account balance is ₦200,000, what is the company's available credit?
A. ₦300,000
Correct B. ₦400,000
C. ₦500,000
D. ₦600,000

Correct Answer: B

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Question 5
A sole trader's business is registered with the Corporate Affairs Commission (CAC). What is the sole trader required to do under the Companies and Allied Matters Act?
A. Keep business records for 5 years
B. File annual returns with the CAC
C. Hold an annual general meeting
Correct D. All of the above

Correct Answer: D

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Question 6
A firm produces two goods, X and Y, using two inputs, labor (L) and capital (K). The production function for good X is given by ( Q_X = 2L^{0.4}K^{0.6} ), while that for good Y is ( Q_Y = 3L^{0.7}K^{0.3} ). If the firm has 100 units of labor and 150 units of capital, how many units of good X can it produce?
Correct A. 200
B. 300
C. 400
D. 500

Correct Answer: A

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Question 7
A bank has a reserve requirement of 10% and a cash reserve ratio of 20%. If it has ₦100,000 in reserves and ₦500,000 in deposits, what is the maximum amount of loans it can make?
A. ₦80,000
Correct B. ₦120,000
C. ₦150,000
D. ₦200,000

Correct Answer: B

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Question 8
A firm is considering investing in a new project that has a net present value (NPV) of ₦100,000 and a payback period of 5 years. If the firm's cost of capital is 10%, what is the internal rate of return (IRR) of the project?
A. 12%
Correct B. 15%
C. 18%
D. 20%

Correct Answer: B

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Question 9
A country has a trade deficit of 100 million and a balance of payments deficit of 200 million. If the country's exchange rate is 1 = ₦200, what is the value of the trade deficit in naira?
A. ₦20 billion
Correct B. ₦25 billion
C. ₦30 billion
D. ₦35 billion

Correct Answer: B

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Question 10
A firm is considering investing in a new project that has a net present value (NPV) of ₦150,000 and a payback period of 3 years. If the firm's cost of capital is 12%, what is the internal rate of return (IRR) of the project?
A. 15%
Correct B. 18%
C. 20%
D. 22%

Correct Answer: B

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Question 11
A sole trader's business is considered a separate legal entity from its owner. True or False?
A. True
Correct B. False
C. Depends on the jurisdiction
D. Not applicable

Correct Answer: B

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Question 12
A company's articles of association may be amended by a special resolution passed by a two-thirds majority vote of its members. True or False?
Correct A. True
B. False
C. Depends on the type of company
D. Not applicable

Correct Answer: A

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Question 13
A production process involves the transformation of inputs into outputs. What is the term for this process?
A. Production
B. Manufacturing
Correct C. Transformation
D. Conversion

Correct Answer: C

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Question 14
A warehouse's inventory management system uses a first-in, first-out (FIFO) method to track stock levels. What is the advantage of this method?
Correct A. It ensures that the oldest stock is sold first
B. It minimizes stock obsolescence
C. It maximizes storage capacity
D. It reduces labor costs

Correct Answer: A

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Question 15
A consumer protection law requires businesses to provide clear and accurate information about their products. What is the purpose of this law?
Correct A. To protect consumers from false advertising
B. To promote fair competition among businesses
C. To ensure product safety and quality
D. To regulate business practices

Correct Answer: A

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Question 16
A firm specializes in producing a single product, which is a type of commodity. The commodity is characterized by its homogeneity, lack of brand loyalty, and high elasticity of demand. What type of commodity is this?
Correct A. Storable commodity
B. Perishable commodity
C. Durable commodity
D. Monopolistic commodity

Correct Answer: A

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Question 17
A company uses the following data to calculate its weighted average cost of capital (WACC):
A. 12%
Correct B. 10%
C. 8%
D. 6%

Correct Answer: B

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Question 18
A firm's production function is given by Q = 2L^0.5K^0.5. If the firm's output is 100 units, and the price of labor is 10 per unit, and the price of capital is 20 per unit, what is the firm's total cost?
A. 1000
Correct B. 2000
C. 3000
D. 4000

Correct Answer: B

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Question 19
A firm's demand function is given by Q = 100 - 2P. If the firm's price is 50, what is the firm's revenue?
Correct A. 2500
B. 3000
C. 3500
D. 4000

Correct Answer: A

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Question 20
A firm's supply function is given by Q = 2P. If the firm's price is 50, what is the firm's quantity supplied?
A. 100
Correct B. 200
C. 300
D. 400

Correct Answer: B

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Question 21
A company's risk management strategy involves diversification of its investments across various asset classes. If the company's portfolio consists of stocks, bonds, and real estate, what type of risk is being managed?
Correct A. Market risk
B. Credit risk
C. Liquidity risk
D. Operational risk

Correct Answer: A

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Question 22
A consumer protection agency is investigating a complaint about a company's unfair business practices. The agency discovers that the company has been engaging in price-fixing with its competitors. What type of business law is being violated?
Correct A. Antitrust law
B. Consumer protection law
C. Contract law
D. Tort law

Correct Answer: A

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Question 23
A company is considering exporting its products to a foreign market. What type of trade is this?
A. Import
Correct B. Export
C. Domestic trade
D. International trade

Correct Answer: B

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Question 24
A sole trader is considering hiring an employee to help with the business. What type of business unit is this?
A. Sole trader
B. Partnership
C. Limited company
Correct D. Sole trader with employee

Correct Answer: D

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Question 25
A company's insurance policy covers losses due to natural disasters. What type of risk is being insured?
A. Market risk
B. Credit risk
C. Liquidity risk
Correct D. Natural disaster risk

Correct Answer: D

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