Practice neco commerce 2019 Past Questions | Edcrib

Question 1 View Details

An insurance company calculates the premium for a motor policy as follows: the base premium is (2\%) of the sum insured; a loading of (25\%) is added for high‑risk areas; a tax of (5\%) is then applied on the loaded premium; finally a discount of (10\%) is given to a loyal customer. If the customer pays ₦48,000, what is the sum insured (in naira)?

A. 1828571

B. 2133333

Correct C. 2031746

D. 2115789

Correct Answer: C

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Question 2 View Details

A Nigerian exporter sells 10,000 kg of cocoa abroad at a world price of $2.50 per kg. The exchange rate is ₦410 per $. The government imposes an export levy of (5\%) on the foreign revenue and a processing fee of (2\%) on the local‑currency proceeds. If the total foreign revenue exceeds $20,000, a rebate of (3\%) on the export levy is granted. Determine the net amount in naira the exporter receives.

Correct A. 9557818

B. 9324700

C. 9542750

D. 9752875

Correct Answer: A

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Question 3 View Details

A small manufacturing firm needs ₦5,000,000 for new equipment. It can either obtain a bank loan at 12\% per annum payable annually for 5 years, or issue new ordinary shares. If it issues shares, the expected dividend yield is 8\% per year and the market price per share is ₦250. The firm currently has 80,000 shares outstanding. Assuming the share issue raises exactly the required amount and that the cost of equity is approximated by the dividend yield, which financing option has the lower annual cost to the firm?

A. Both options cost the same

Correct B. Issue shares

C. Bank loan

D. Issue preferred shares

Correct Answer: B

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Question 4 View Details

In a given year, Nigeria exported goods worth ₦1.2 trillion and imported goods worth ₦1.5 trillion. What was the trade balance for that year (state whether it is a deficit or a surplus and give the amount)?

A. ₦200 billion deficit

Correct B. ₦300 billion deficit

C. ₦300 billion surplus

D. ₦500 billion deficit

Correct Answer: B

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Question 5 View Details

A Nigerian importer wants to bring in 8,000 units of a product whose world price is $15 per unit. The first 5,000 units are covered by a preferential tariff of (5\%), while the remaining units are subject to the standard import tariff of (20\%). The exchange rate is ₦420 per $. Calculate the total cost in naira for the importer.

A. 60480000

B. 50400000

C. 52920000

Correct D. 55755000

Correct Answer: D

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Question 6 View Details

An electronic retailer advertises a television as "energy‑efficient", claiming it saves $15\%$ on annual electricity consumption compared with a standard model that uses $150$ kWh per year. The buyer pays a marked price of $M$ naira. The retailer adds a hidden surcharge of $5\%$ on the marked price and then applies a $10\%$ discount on the resulting amount. The buyer therefore pays $120\,000$ naira. The actual electricity consumption of the purchased TV is measured at $138$ kWh per year. Electricity costs $30$ naira per kWh. The warranty covers only manufacturing defects, not mis‑representation. (a) What is the actual percentage saving in electricity? (b) What was the marked price $M$? (c) What is the total monetary loss to the consumer, consisting of the over‑payment on the TV price plus the monetary value of the shortfall in electricity saving? Express your answer in naira, rounded to the nearest naira.

Correct A. 6029

B. 6180

C. 5920

D. 6500

Correct Answer: A

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Question 7 View Details

An entrepreneur invests $200\,000$ naira as capital in a sole‑trader business and records a net profit of $48\,000$ naira for the year. What is the rate of return on capital expressed as a percentage (to the nearest whole percent)?

A. 20

B. 28

Correct C. 24

D. 32

Correct Answer: C

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Question 8 View Details

An item has an annual demand of $12\,000$ units. The ordering cost is $5\,000$ naira per order. The unit cost is $150$ naira and the holding cost is 20 % of the unit cost per year. The warehouse can store at most $800$ units at any time. If an order quantity exceeds $1\,200$ units the unit cost falls by 10 %. Determine the order quantity that minimises the total annual cost while respecting the storage limit, and state the corresponding total annual cost (including purchase, ordering and holding costs).

A. 1860000

B. 1705800

Correct C. 1887000

D. 1899000

Correct Answer: C

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Question 9 View Details

An individual borrows $500\,000$ naira from a bank. The nominal annual interest rate is 12 % convertible semi‑annually, and the loan is to be repaid in equal annual installments over 3 years, with the first payment due at the end of the first year. The bank also charges a processing fee equal to 2 % of the loan amount, payable immediately, and adds a yearly service charge of $5\,000$ naira to each installment. Calculate the amount of each annual installment (including the service charge) that the borrower must pay. Give your answer in naira, rounded to the nearest naira.

Correct A. 214847

B. 213900

C. 215000

D. 214500

Correct Answer: A

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Question 10 View Details

Three product categories A, B and C are stored in a warehouse. Their annual demands are $D_A=40\,000$ units, $D_B=50\,000$ units and $D_C=60\,000$ units. Unit costs are ₦80, ₦50 and ₦30 respectively. The holding‑cost rates are 25 % for A, 20 % for B and 15 % for C. The ordering cost per order is the same for all items, ₦4\,000. Because of space limitations the total average inventory cannot exceed 10\,000 units, i.e. $\frac{Q_A+Q_B+Q_C}{2}\le 10\,000$. Assuming independent EOQ calculations but adjusting the order quantities to satisfy the space constraint, determine the optimal order quantities $Q_A, Q_B, Q_C$ that minimise total annual cost, and compute that minimum total annual cost (including purchase, ordering and holding costs). Give the order quantities rounded to the nearest whole unit and the total cost rounded to the nearest naira.

Correct A. 3956,6188,9856,7689836

B. 4000,6200,9900,7700000

C. 3800,6100,9700,7600000

D. 3956,6188,9856,7700000

Correct Answer: A

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Question 11 View Details

A retailer purchases 250 units of a product whose list price is $\text{₦}500$ per unit. The supplier offers a trade discount of $5\\%$ on the first 100 units, $8\\%$ on the next 150 units, and no discount on any further units. The retailer also receives a cash discount of $2\\%$ on the total invoice if payment is made within 10 days. He marks up the goods by $30\\%$ on the cost price (after all discounts) and sells all 250 units at the marked price. However, 30 units are later returned by customers and a full refund is given. Calculate the retailer's net profit (in naira).

A. 16758.00

B. 16776.00

Correct C. 16440.48

D. 17640.00

Correct Answer: C

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Question 12 View Details

A shopkeeper buys 40 shirts at $\text{₦}2,500$ each. He marks them up by $25\\%$ and offers a cash discount of $10\\%$ to customers who pay cash. If a customer buys 5 shirts and pays cash, what is the total amount payable (in naira)?

Correct A. 14062.50

B. 14375.00

C. 13500.00

D. 15625.00

Correct Answer: A

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Question 13 View Details

An advertising agency plans a campaign using two media: TV and radio. A 30‑second TV spot costs $\text{₦}150,000$ and reaches 1.2\,million viewers per airing. A 60‑second radio spot costs $\text{₦}30,000$ and reaches 0.5\,million listeners per airing. The target audience size is 4\,million people. One GRP equals one percent of the target audience. The client requires at least $100\\%$ GRPs in total and at least $20\\%$ of the total GRPs must come from TV. The agency may purchase any whole number of TV and radio spots. Determine the number of TV spots and radio spots that meet the requirements at the minimum total cost, and state that minimum cost (in naira).

A. 2 TV spots, 4 radio spots, total cost ₦420,000

Correct B. 1 TV spot, 6 radio spots, total cost ₦330,000

C. 0 TV spots, 8 radio spots, total cost ₦240,000

D. 1 TV spot, 5 radio spots, total cost ₦300,000

Correct Answer: B

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Question 14 View Details

An investor buys shares of XYZ Ltd on the Nigerian Stock Exchange in three separate transactions: (i) 200 shares at $\text{₦}1,250$ each with a brokerage commission of $0.5\\%$ of the transaction value; (ii) 150 shares at $\text{₦}1,300$ each with the same commission rate; (iii) 250 shares at $\text{₦}1,280$ each with the same commission rate. Later the investor sells 400 shares at $\text{₦}1,350$ each, paying a $0.5\\%$ commission on the sale and a capital gains tax of $10\\%$ on the profit before tax. The remaining 200 shares are still held. Determine the investor's net profit (in naira) after accounting for all commissions and the capital gains tax on the sale.

A. 21500

Correct B. 22275

C. 23000

D. 20775

Correct Answer: B

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Question 15 View Details

A wholesaler must transport 1,200\,kg of goods from Lagos to Abuja. He can use either a truck or a train.\n- Truck: fixed cost per trip $\text{₦}15,000$, variable cost $\text{₦}8$ per kg, and a maximum load of 600\,kg per trip.\n- Train: fixed cost per trip $\text{₦}25,000$, variable cost $\text{₦}5$ per kg, and a maximum load of 800\,kg per trip.\nThe wholesaler may make any whole number of trips of each mode. Determine the combination of truck trips and train trips that will deliver the 1,200\,kg at the minimum total transportation cost, and state that minimum cost (in naira).

Correct A. 2 truck trips, 0 train trips, total cost ₦39,600

B. 1 truck trips, 0 train trips, total cost ₦24,600

C. 0 truck trips, 2 train trips, total cost ₦56,000

D. 1 truck trips, 1 train trips, total cost ₦47,800

Correct Answer: A

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Question 16 View Details

An investor buys $200$ shares of a company at a market price of ₦150 per share. A brokerage charges a flat fee of ₦500 plus $0.5\%$ of the transaction value for each purchase or sale. After two weeks the share price rises by $12\%$, and the investor sells half of his shares. The remaining shares then fall by $8\%$ over the next week. Determine the investor's net profit (or loss) after all transactions, including all brokerage fees.

A. 1012

B. 922

C. 1122

Correct D. 1022

Correct Answer: D

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Question 17 View Details

An investor makes three separate purchases of XYZ shares: $150$ shares at ₦120 each, $200$ shares at ₦135 each, and $250$ shares at ₦128 each. The brokerage charges $0.75\%$ of the transaction value for each purchase or sale (no flat fee). Later the investor sells $400$ shares at a market price of ₦140 each, paying the same brokerage rate. Assuming the remaining shares are valued at the same market price, determine the overall profit or loss.

Correct A. 6002.5

B. 6580

C. 7000

D. 6422.5

Correct Answer: A

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Question 18 View Details

A retailer buys a batch of $50$ units of a product for a total cost of ₦2,800. He adds a markup of $25\%$ on the cost price and sells all units. What is the total profit earned?

A. 840

B. 560

Correct C. 700

D. 750

Correct Answer: C

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Question 19 View Details

A wholesaler purchases goods at a cost of ₦1,200 per unit. He offers a trade discount of $5\%$ on the invoice amount for purchases of at least $100$ units, and an additional cash discount of $2\%$ if payment is made within 10 days. The wholesaler sells each unit at a selling price of ₦1,500. If a retailer buys $150$ units and pays within 10 days, what is the wholesaler's net profit on this transaction after all discounts?

Correct A. 57420

B. 48600

C. 54000

D. 29475

Correct Answer: A

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Question 20 View Details

A telecom company charges for local calls as follows: the first 3 minutes are billed at ₦30 per minute, the next 7 minutes at ₦25 per minute, and any additional minutes at ₦20 per minute. A value‑added tax (VAT) of $7.5\%$ is added to the total call charge. If a customer makes a call lasting $15$ minutes $40$ seconds, rounded up to the next whole minute for billing, what is the total amount payable including VAT? (Assume billing is per whole minute.)

Correct A. 413.88

B. 446.13

C. 411.95

D. 392.38

Correct Answer: A

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Question 21 View Details

An importer wants to bring 5,000\,kg of cocoa beans from Ghana. Supplier\,A quotes GHS\,12 per\,kg, Supplier\,B quotes US$\,0.80 per\,kg. Import duty is $5\%$ of the CIF value, handling fee is $2\%$ of the amount after duty. Freight costs US$\,0.10 per\,kg and insurance is $1\%$ of the FOB value. The exchange rates are $\text{₦}560$ per US$ and $\text{₦}0.80$ per GHS. Which supplier gives the lower total cost in Naira? State the cheaper supplier and its total cost (to the nearest kobo).

A. Supplier B; total cost $\text{₦}2,722,910.40$

B. Supplier B; total cost $\text{₦}1,800,000.00$

Correct C. Supplier A; total cost $\text{₦}351,802.08$

D. Supplier A; total cost $\text{₦}350,000.00$

Correct Answer: C

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Question 22 View Details

A retailer advertises a "buy one, get 20\% off the second" deal on a washing machine whose marked price is $\text{₦}120,000$. A consumer buys two machines and pays $\text{₦}216,000$. The retailer claims the discount was applied only to the second machine. (i) Verify whether the amount paid is consistent with the retailer's claim. (ii) If the retailer's cost price per machine is $\text{₦}70,000$, calculate the retailer's profit or loss on the transaction. (iii) State whether the retailer's practice complies with the Consumer Protection Act's rule that discounts must be clearly disclosed and not misleading.

Correct A. (i) Consistent; (ii) Profit $\text{₦}76,000$; (iii) Complies with the Act

B. (i) Consistent; (ii) Profit $\text{₦}68,000$; (iii) Complies with the Act

C. (i) Inconsistent; (ii) Loss $\text{₦}4,000$; (iii) Does not comply with the Act

D. (i) Inconsistent; (ii) Profit $\text{₦}76,000$; (iii) Does not comply with the Act

Correct Answer: A

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Question 23 View Details

A partnership between A and B shares profit in the ratio $3:5$. A also receives a fixed salary of $\text{₦}20,000$ per month before profit is divided. In a particular month the partnership records total revenue of $\text{₦}200,000$ and total expenses (excluding A's salary) of $\text{₦}80,000$. Determine the amount each partner takes home for that month.

A. A receives \$\\text{₦}45,000\$; B receives \$\\text{₦}75,000\$

B. A receives \$\\text{₦}82,500\$; B receives \$\\text{₦}37,500\$

Correct C. A receives $\text{₦}57,500$; B receives $\text{₦}62,500$

D. A receives \$\\text{₦}65,000\$; B receives \$\\text{₦}75,000\$

Correct Answer: C

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Question 24 View Details

A home‑based baker sells 30 cupcakes at $\text{₦}500$ each. The ingredient cost per cupcake is $\text{₦}200$ and the total overhead (electricity, gas) for the batch is $\text{₦}1,500$. What is the total profit for the batch?

A. $\text{₦}9,000$

Correct B. $\text{₦}7,500$

C. $\text{₦}6,000$

D. $\text{₦}8,500$

Correct Answer: B

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Question 25 View Details

A retailer has an annual demand of 12,000 units for a product. Daily demand is constant and the standard deviation of daily demand is 5 units. Lead time is 10 days. The retailer desires a 95\% service level (z = 1.65). Holding cost is $\text{₦}2$ per unit per year and ordering cost is $\text{₦}500$ per order.\n(i) Compute the safety stock.\n(ii) Determine the reorder point (in units).\n(iii) Calculate the Economic Order Quantity (EOQ).\n(iv) Find the total annual inventory cost (ordering + holding).

A. Safety stock: 28 units; Reorder point: 355 units; EOQ: 2,460 units; Total annual cost: \$\\text{₦}4,970\$

B. Safety stock: 25 units; Reorder point: 350 units; EOQ: 2,500 units; Total annual cost: \$\\text{₦}4,800\$

C. Safety stock: 30 units; Reorder point: 360 units; EOQ: 2,400 units; Total annual cost: \$\\text{₦}5,000\$

Correct D. Safety stock: 27 units; Reorder point: 356 units; EOQ: 2,450 units; Total annual cost: $\text{₦}4,953$

Correct Answer: D

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