Post Utme Crawford University 2022 Commerce Question 2

Practice objective / multiple choice question 2 from the 2022 Post Utme Crawford University Commerce examination.

Post Utme Crawford University 2022 Commerce Objective / Multiple Choice
Question 2 POST_UTME_CRAWFORD_UNIVERSITY • 2022 • COMMERCE • objective

A firm is considering outsourcing its logistics operations to a third-party provider. The firm estimates that the cost of outsourcing will be ₦2,000,000 per year, while the cost of maintaining its own logistics operations will be ₦1,500,000 per year. However, the firm also estimates that outsourcing will result in a 10% increase in delivery times. What is the net effect of outsourcing on the firm's costs?

Answer Options

A. The firm's costs will decrease by ₦500,000 per year
Correct Answer B. The firm's costs will increase by ₦500,000 per year
C. The firm's costs will remain the same
D. The firm's costs will increase by ₦1,000,000 per year
Correct Answer
B
Correct Option:
The firm's costs will increase by ₦500,000 per year

About This Question

This is Post Utme Crawford University 2022 Commerce Question 2. It is one of the objective questions from the 2022 Post Utme Crawford University Commerce examination.

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