neco 2023 commerce | Essay

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Question 1 View Details
Commerce is the activity of buying and selling goods and services and it plays a vital role in the economic development of a country.
Question Parts
(a)
Define commerce and distinguish it from trade.
(b)
Explain three ways in which commerce contributes to national development.
(c)
Discuss the impact of e‑commerce on traditional retail businesses in Nigeria, giving two positive and two negative effects.
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Question 2 View Details
In 2022 Nigeria imported 1.2 million tonnes of wheat at an average price of ₦150,000 per tonne and exported 0.8 million tonnes of cocoa at an average price of ₦250,000 per tonne. The exchange rate at that time was ₦410 = US$1. The world market price of wheat was US$350 per tonne and that of cocoa was US$2,200 per tonne.
Question Parts
(a)
Calculate the total value of wheat imports in Naira and in US dollars.
(b)
Calculate the total value of cocoa exports in Naira and in US dollars.
(c)
Using the world market prices as the base, compute Nigeria's terms of trade index. (Use the formula: Terms of Trade = (Export Price Index ÷ Import Price Index) × 100). Show all steps.
(d)
Based on the terms of trade obtained, comment on whether Nigeria's trade position is favourable and suggest one policy measure that could improve it.
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Question 3 View Details
Define a sole proprietorship and a partnership. Distinguish between the two forms of business organisation in the context of home trade, and outline two advantages and two disadvantages of each.
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Question 4 View Details
A retailer purchases 200 units of a product at ₦150 each. He adds a markup of 40 % on the cost price and offers a discount of 10 % on the marked price to customers.
Question Parts
(a)
Calculate the selling price per unit after the discount.
(b)
Determine the total profit earned if all units are sold.
(c)
If the retailer has fixed costs of ₦8,000, calculate the break‑even quantity (round up to the next whole unit).
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Question 5 View Details
A retailer operates a small shop that deals in electronic accessories. During the month the retailer purchased goods worth ₦500,000 on credit. The goods are sold at a markup of 30 % on cost. Cash sales amounted to ₦260,000 and credit sales to ₦340,000. The average credit period granted to customers is 45 days and the retailer offers a 5 % discount for cash payment made within 10 days. Assume that 40 % of the credit sales were paid within the discount period. At the end of the month the closing inventory was ₦120,000.
Question Parts
(a)
Explain the concept of stock turnover and give the formula used to calculate it.
(b)
Using the information given, compute the following:
() The gross profit for the month.
() The net cash received from customers after allowing for the cash‑discount policy.
() The retailer’s average inventory holding period (in days).
(c)
Discuss two advantages and two disadvantages of offering a cash‑discount policy for the retailer.
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Question 6 View Details
A wholesaler deals in imported kitchen appliances. The purchase price per unit is ₦2,500 and the selling price per unit is ₦3,200. Fixed operating costs amount to ₦150,000 per month (rent, salaries, utilities). In addition to the purchase price, the wholesaler incurs variable costs of ₦300 per unit for packaging and transportation.
Question Parts
(a)
Define the break‑even point for a wholesale business and write the formula used to calculate the break‑even volume in units.
(b)
Based on the data provided, determine:
() The break‑even volume in units.
() The sales volume required to achieve a target profit of ₦120,000 for the month.
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Question 7 View Details
Three friends, Ada, Bayo and Chidi, intend to start a business selling electronic accessories. They each have different amounts of capital and wish to limit personal liability. They are considering three forms of business organization: sole proprietorship, partnership, and private limited company.
Question Parts
(a)
Explain the key legal characteristics of each of the three forms of business organization, focusing on ownership, liability and continuity of existence.
(b)
Using the scenario, evaluate which form of business organization would best suit the friends' objectives. In your evaluation consider capital requirements, profit sharing, decision‑making and liability.
(c)
The friends decide to register a private limited company with a total share capital of ₦1,200,000, divided equally among them.
() Calculate the amount of share capital each must contribute.
() Discuss two statutory compliance requirements the company must fulfil in its first year of operation.
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Question 8 View Details
A medium‑size manufacturing firm plans to expand its production capacity and estimates that it needs ₦15,000,000 for the project.
Question Parts
(a)
Distinguish between short‑term and long‑term sources of finance. Give two examples of each and state one advantage and one disadvantage for every example.
(b)
The firm decides to raise part of the required funds through a bank loan at 12% per annum payable over 5 years, and the remaining amount by issuing 10,000 debentures each with a face value of ₦500 and a coupon rate of 12% payable annually. Calculate the total annual interest expense the firm will incur after the financing is in place.
(c)
Discuss two non‑financial factors the firm should consider when choosing between the bank loan and the debenture issue.
(d)
If the firm’s projected profit before interest and tax (EBIT) for the next year is ₦4,000,000, assess whether the firm will be able to meet its interest obligations under the proposed financing. Show your calculation and give a brief conclusion.
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