POST UTME COVENANT UNIVERSITY 2022 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A company is sued for violating the Consumer Protection Act. The court rules that the company must pay damages to the consumer. However, the company appeals the decision, arguing that the consumer was aware of the risks involved in purchasing the product. Which of the following is a valid defense against the consumer protection claim?
A. The consumer was aware of the risks involved in purchasing the product.
B. The company did not intentionally violate the Consumer Protection Act.
C. The product was not defective at the time of sale.
D. The consumer did not suffer any damages as a result of the product's defect.
Question 2
A firm has two warehouses, X and Y. Warehouse X has a capacity of 1000 units, while warehouse Y has a capacity of 500 units. If the firm receives 1200 units of stock, how many units can be stored in warehouse X?
A. 1000
B. 800
C. 600
D. 400
Question 3
A company uses a first-in-first-out (FIFO) inventory system to manage its inventory. The company receives a shipment of 1,000 units and already has 500 units in stock. What is the new stock level?
A. 1,000
B. 1,500
C. 2,000
D. 2,500
Question 4
A firm has a production process that involves the following steps: Raw Materials → Work-in-Progress → Finished Goods. If the firm's production process has a 20% defect rate, what is the probability that a randomly selected unit from the finished goods inventory is defective?
A. 0.2
B. 0.4
C. 0.6
D. 0.8
Question 5
A firm is considering two production processes: one that requires a fixed cost of ₦100,000 and a variable cost of ₦50 per unit, and another that requires a fixed cost of ₦150,000 and a variable cost of ₦30 per unit. If the selling price of the product is ₦80 per unit, which production process should the firm adopt?
A. Process 1
B. Process 2
C. Both processes are equally profitable
D. Neither process is profitable
Question 6
A company has a capital structure consisting of 60% equity and 40% debt. If the company's cost of equity is 12% and the cost of debt is 6%, what is the weighted average cost of capital (WACC)?
A. 7.2%
B. 8.4%
C. 9.6%
D. 10.8%
Question 7
A company is considering two different advertising strategies for its new product. Strategy A involves a one-time payment of ₦5 million to a popular celebrity to endorse the product. Strategy B involves a series of advertisements on social media that cost ₦1 million per month for 6 months. If the company expects to sell 10,000 units of the product, which strategy should it choose?
A. Strategy A
B. Strategy B
C. Both strategies are equally effective
D. Neither strategy is effective
Question 8
A firm's revenue function is given by the equation ( R = 2p^2 ), where R is the revenue and p is the price. If the firm wants to maximize its revenue, what price should it charge?
A. ₦10
B. ₦20
C. ₦30
D. ₦40
Question 9
A producer produces two goods, A and B, using two inputs, labor and capital. The production function for good A is given by ( Q_A = 2L^0.5K^{0.5} ), and the production function for good B is given by ( Q_B = 3L^{0.7}K^{0.3} ). If the producer has 100 units of labor and 50 units of capital, how many units of good A and good B should the producer produce?
A. ( Q_A = 20, Q_B = 30 )
B. ( Q_A = 30, Q_B = 20 )
C. ( Q_A = 40, Q_B = 10 )
D. ( Q_A = 10, Q_B = 40 )
Question 10
A firm is considering entering a new market. The market research indicates that the demand for the product is given by the equation Q = 100 - 2P, where Q is the quantity demanded and P is the price. If the firm wants to maximize its profit, what should it do?
A. Increase the price to maximize profit
B. Decrease the price to maximize profit
C. Keep the price constant to maximize profit
D. Do not enter the market
Question 11
A company has a warehouse with a capacity of 10,000 units. The company receives a shipment of 5,000 units and already has 3,000 units in stock. What is the new stock level?
A. 8,000
B. 9,000
C. 10,000
D. 11,000
Question 12
A person purchases a life insurance policy that pays out a lump sum in the event of their death. The policy has a premium payment term of 20 years. Which of the following is a potential risk associated with this type of policy?
A. The policy may lapse if the premiums are not paid on time.
B. The policy may not pay out if the person dies within the premium payment term.
C. The policy may not pay out if the person dies after the premium payment term.
D. The policy may not pay out if the person dies due to a pre-existing medical condition.
Question 13
In a sole trade business, the owner's personal assets are not protected from business liabilities. What is the primary reason for this lack of protection?
A. The owner's personal assets are not registered as business assets.
B. The business is not registered as a separate legal entity.
C. The owner has not obtained business insurance.
D. The owner has not filed tax returns.
Question 14
A company has a sole trader business. The company's profit is calculated as follows: Revenue - Cost of Goods Sold - Operating Expenses. If the company's revenue is ₦1,500,000, cost of goods sold is ₦800,000, and operating expenses are ₦200,000, what is the company's profit?
A. ₦500,000
B. ₦600,000
C. ₦700,000
D. ₦800,000
Question 15
A company has two production lines, A and B. Line A produces 60 units per hour, while line B produces 40 units per hour. If the company operates for 8 hours a day, what is the total number of units produced by both lines in a day?
A. 480
B. 640
C. 800
D. 960

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