POST UTME COAL CITY UNIVERSITY 2024 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A company is considering implementing a just-in-time (JIT) inventory system. Using the concept of inventory turnover, explain why JIT is more effective than traditional inventory systems in reducing inventory costs.
A. Because JIT reduces inventory costs by minimizing inventory holding costs
B. Because JIT increases inventory turnover by reducing lead times
C. Because JIT reduces inventory costs by minimizing ordering costs
D. Because JIT increases inventory turnover by minimizing inventory levels
Question 2
A company is considering investing in a new project. The project has a required rate of return of 12% and a present value of ₦10,000. What is the present value of the project if the required rate of return is increased to 15%?
A. ₦8,333
B. ₦10,000
C. ₦11,667
D. ₦12,500
Question 3
A firm specializes in producing a single product. This specialization is an example of:
A. Economies of scale
B. Division of labor
C. Product differentiation
D. Monopolistic competition
Question 4
A warehouse has a storage capacity of 1000 units. If 300 units are already stored, what is the remaining capacity?
A. 500 units
B. 600 units
C. 700 units
D. 800 units
Question 5
In a perfectly competitive market, what is the relationship between the marginal revenue product of labor (MRPL) and the marginal factor cost of labor (MFC)?
A. MRPL > MFC
B. MRPL < MFC
C. MRPL = MFC
D. MRPL and MFC are unrelated
Question 6
A company is considering two different investment projects. Project A has a higher expected return but also a higher level of risk. Project B has a lower expected return but also a lower level of risk. Which of the following is the best way to evaluate the risk of each project?
A. Using the expected return alone.
B. Using the standard deviation of returns alone.
C. Using the coefficient of variation (CV) of returns.
D. Using a combination of expected return and standard deviation of returns.
Question 7
A marketing firm is analyzing the effect of a new advertising campaign on sales. The data shows a positive correlation between the two variables. However, the firm wants to determine if the relationship is causal. Using the concept of confounding variables, explain why the firm should consider using a regression analysis to control for other factors that may influence sales.
A. To determine the effect of the advertising campaign on sales
B. To control for other factors that may influence sales
C. To determine the correlation between advertising expenditure and sales
D. To determine the regression line between advertising expenditure and sales
Question 8
A company is considering the implementation of a just-in-time (JIT) inventory system. Which of the following is a key benefit of JIT?
A. Reduced inventory costs
B. Improved product quality
C. Increased production efficiency
D. Enhanced customer satisfaction
Question 9
A company is considering two investment options: Option A, which has a 10% annual return and a 5% risk, and Option B, which has a 15% annual return and a 10% risk. Using the Capital Asset Pricing Model (CAPM), calculate the expected return on Option B, given that the risk-free rate is 2% and the market risk premium is 6%.
A. 17.5%
B. 18%
C. 18.5%
D. 19%
Question 10
A sole trader's business is considered a separate legal entity from its owner. However, in the event of the owner's death, the business may be affected by the following legal issues:
A. The business may be subject to inheritance tax.
B. The business may be forced to close due to lack of funding.
C. The business may be liable for the owner's personal debts.
D. The business may be required to pay a probate fee.
Question 11
A product has a demand function of Q = 100 - 2P. If the price is set at ₦50, how many units will be demanded?
A. 50 units
B. 75 units
C. 100 units
D. 125 units
Question 12
A firm is considering two different transportation modes to deliver its products. Mode A costs ₦50 per unit and has a delivery time of 3 days. Mode B costs ₦30 per unit and has a delivery time of 5 days. If the firm's current delivery time is 4 days, which mode should it use to minimize its transportation costs?
A. Mode A
B. Mode B
C. Both modes are equally effective
D. Neither mode is effective
Question 13
A bank's balance sheet is given by the equation Assets = Liabilities + Equity. If the bank's assets increase by 10% and its liabilities increase by 5%, what is the percentage increase in equity?
A. 2.5%
B. 5%
C. 7.5%
D. 10%
Question 14
A consumer has a budget constraint of 100 and a preference for two goods, X and Y. The prices of X and Y are 5 and 10 respectively. If the consumer spends all their budget on X, what is the maximum amount they can spend on Y?
A. 5
B. 10
C. 15
D. 20
Question 15
In a perfect market, the demand curve and supply curve intersect at the equilibrium price and quantity. However, in a market with externalities, the equilibrium price and quantity may not reflect the true social costs and benefits. Which of the following best describes the effect of externalities on the equilibrium price and quantity?
A. The equilibrium price and quantity will increase due to the positive externality.
B. The equilibrium price and quantity will decrease due to the negative externality.
C. The equilibrium price will increase, but the quantity will decrease due to the negative externality.
D. The equilibrium price will decrease, but the quantity will increase due to the positive externality.

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