neco 2022 commerce | Essay

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Question 1 View Details
Commerce is the activity that links producers and consumers in the economy. Answer the following:
Question Parts
(a)
Define commerce in your own words.
(b)
State the four major functions of commerce.
(c)
Evaluate how each of the functions you listed contributes to economic development in Nigeria.
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Question 2 View Details
The table below shows Nigeria's export and import values (in million Naira) of three commodities for the years 2021 and 2022. | Commodity | Export 2021 | Export 2022 | Import 2021 | Import 2022 | |-----------|-------------|-------------|-------------|-------------| | Crude Oil | 5,000 | 4,500 | 500 | 600 | | Cocoa | 200 | 250 | 50 | 55 | | Cement | 150 | 180 | 300 | 350 | Answer the following questions:
Question Parts
(a)
Calculate the total export value, total import value and the overall trade balance for each year.
(b)
Determine the percentage change from 2021 to 2022 for each commodity:
(c)
Based on the results above, discuss the trend in Nigeria's terms of trade between 2021 and 2022 and suggest two policy measures that could improve the trade balance.
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Question 3 View Details
A young entrepreneur runs a home‑based trading business dealing in electronic accessories. The business incurs fixed costs of \u20a9120,000 per month. The variable cost per unit is \u20a92,500 and the normal selling price per unit is \u20a94,000.
Question Parts
(a)
Determine the break‑even quantity of units per month.
(b)
The trader decides to offer a 10 % discount on the selling price. As a result, the expected sales volume increases by 20 % over the break‑even quantity calculated in part (a). Calculate the new monthly profit (or loss).
(c)
Based on your calculation in part (b), advise whether the 10 % discount policy is financially advisable. Support your recommendation with brief calculations.
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Question 4 View Details
Nigeria imports wheat flour and exports cocoa beans. The data for the 2022 fiscal year are as follows:\n\n- Export value of cocoa beans: \u20a91.2 billion; quantity exported: 150,000 tonnes; world price per tonne: \u20a98,000.\n- Import value of wheat flour: \u20a9900 million; quantity imported: 120,000 tonnes; world price per tonne: \u20a97,500.\n- The exchange rate moved from \u20a9410 per US$ at the start of the year to \u20a9460 per US$ at the end of the year.\n- The government imposes a 5 % ad valorem tariff on wheat flour imports.
Question Parts
(a)
Calculate the terms of trade ratio for the year using the given world prices.
(b)
Determine the current account balance for the year, ignoring other items.
(c)
If the 5 % tariff is applied to wheat flour imports, calculate the new effective import cost in Naira and the revised current account balance.
(d)
Discuss two possible macro‑economic effects of a deteriorating terms of trade for Nigeria.
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Question 5 View Details
A retailer purchases a single type of consumer electronic item at a cost price of ₦5,000 per unit.
Question Parts
(a)
If the retailer applies a markup of 30 % on the cost price, determine the marked price per unit.
(b)
A seasonal discount of 15 % is offered on the marked price. Calculate (i) the net selling price per unit after the discount and (ii) the profit earned on each unit.
(c)
The retailer expects to sell 200 units each month at the net price obtained in part (b). (i) Compute the total profit for the month. (ii) To increase the monthly profit by 20 % without altering the cost price or the markup, what discount rate should be applied instead of the 15 % discount? Show your calculation.
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Question 6 View Details
A wholesaler purchases 10,000 units of a product from a manufacturer at ₦3,000 per unit.
Question Parts
(a)
The wholesaler adds a markup of 40 % on his purchase cost and then gives a trade discount of 10 % on the resulting list price. If a cash discount of 2 % is offered for payment within 30 days, determine the net price per unit that retailers will pay when they take the cash discount.
(b)
Assuming the retailers order 8,000 units now and all of them take the cash discount, calculate the total cash inflow the wholesaler will receive from this order.
(c)
The wholesaler incurs operating expenses of ₦1,200,000 per quarter. Using the cash inflow from part (b) and the cost of the 8,000 units sold, determine the profit (or loss) for the first quarter.
(d)
The wholesaler is considering removing the cash discount and extending the credit period to 90 days while keeping the trade discount unchanged. (i) State the new net price per unit (without cash discount). (ii) Discuss qualitatively how this change is likely to affect the wholesaler’s cash flow and overall profitability, assuming the same order quantity.
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Question 7 View Details
Three friends, Ada, Bayo and Chidi, plan to start a small manufacturing enterprise that will produce eco‑friendly bags. They are evaluating different forms of business organization for their venture.
Question Parts
(a)
Explain the key legal differences between a partnership and a limited liability company (LLC) that are relevant to the friends' venture.
(b)
Considering that the friends want to limit personal liability and attract external investors, recommend the most suitable form of organization for their business and justify your recommendation with at least three reasons.
(c)
Assuming they adopt the recommended form and each contributes capital as follows: Ada ₦200,000, Bayo ₦150,000 and Chidi ₦250,000. The company earns a profit of ₦300,000 for the year and decides to retain 40% of the profit for future expansion. Calculate (i) the amount of retained earnings, (ii) the remaining profit available for distribution, and (iii) each partner’s share of the distributable profit in proportion to their original capital contributions.
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Question 8 View Details
GreenHarvest Ltd., a medium‑sized agro‑processing firm, needs ₦5,000,000 to purchase new processing equipment. The firm is evaluating three sources of finance: a bank loan, issuing 5% debentures, and a rights issue of ordinary shares.
Question Parts
(a)
For each of the three sources of finance mentioned, discuss one advantage and one disadvantage in the context of GreenHarvest Ltd.
(b)
The bank offers a loan of ₦5,000,000 at an annual interest rate of 12% payable annually over 5 years. Assuming the loan is repaid by equal annual repayments of principal only (i.e., ₦1,000,000 each year) and interest is calculated on the outstanding balance each year, calculate (i) the total interest payable over the life of the loan and (ii) the average annual repayment (principal + interest).
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