Practice neco commerce 2024 Past Questions | Edcrib

Question 1 View Details

A transport company charges a base rate of $\text{₦}200$ per kilometre, a fuel surcharge of $3\%$ of the base charge per tonne of cargo, and a fixed handling fee of $\text{₦}15,000$ per shipment. For a distance of $300$ km, the total revenue earned was $\text{₦}210,000$. Determine the weight of the cargo in tonnes.

Correct A. 75

B. 80

C. 65

D. 70

Correct Answer: A

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Question 2 View Details

An importer purchases goods priced at $US\$45,000$. The exchange rate is $\text{₦}460$ per US\$, and the bank charges a commission of $2\%$ on the converted amount. The importer receives a $5\%$ early‑payment discount on the goods price and pays a freight forwarding fee of $\text{₦}150,000$. If the importer wants a profit margin of $12\%$ on the total landed cost, what should be the selling price in Naira?

A. 23815680

Correct B. 22633296

C. 22465296

D. 22192800

Correct Answer: B

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Question 3 View Details

A warehouse handles a single product with an annual demand of $12,000$ units. The ordering cost is $\text{₦}8,000$ per order and the unit cost is $\text{₦}500$. Holding cost equals $25\%$ of the unit cost per year. The warehouse can store at most $1,200$ units at any time, and the company wishes to keep safety stock equal to $10\%$ of the order quantity. Determine the optimal order quantity that satisfies the storage constraint and compute the total annual cost (including purchase, ordering and holding costs).

A. Optimal order quantity = 1,050 units; Total annual cost = ₦6,180,500

B. Optimal order quantity = 950 units; Total annual cost = ₦6,100,000

Correct C. Optimal order quantity = 1,090 units; Total annual cost = ₦6,169,823

D. Optimal order quantity = 1,200 units; Total annual cost = ₦6,250,000

Correct Answer: C

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Question 4 View Details

A retailer buys an item for $\text{₦}4,500$. He applies a markup of $30\%$ on cost and then offers a discount of $5\%$ on the marked price to attract customers. What is the final selling price in Naira (rounded to the nearest Naira)?

A. 5,558

Correct B. 5,858

C. 5,625

D. 5,700

Correct Answer: B

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Question 5 View Details

A buyer obtains credit of $\text{₦}200,000$ from a supplier, payable in $90$ days. The simple interest rate is $12\%$ per annum. What amount must the buyer pay at the end of the credit period?

A. 207,500

B. 205,000

Correct C. 206,000

D. 210,000

Correct Answer: C

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Question 6 View Details

A motor insurance company calculates its gross premium as follows: starting from the base premium, a $12\%$ loading for administrative expenses is added, then a $5\%$ commission is deducted for the agent, and finally a $2.5\%$ tax is added on the amount after commission. The net premium received by the company is ₦150,000. Find the base premium (in naira).

A. ₦141,000

B. ₦124,100

C. ₦154,100

Correct D. ₦137,540

Correct Answer: D

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Question 7 View Details

A wholesaler purchases goods at a cost price $C$. He gives a trade discount of $10\%$ on the list price $L$, then adds a markup of $25\%$ on the discounted price to obtain the selling price $S$. A retailer receives a cash discount of $2\%$ for early payment on $S$. The wholesaler's net receipt is ₦210,000. Find the original list price $L$.

A. ₦214,286

B. ₦171,429

C. ₦190,400

Correct D. ₦190,476

Correct Answer: D

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Question 8 View Details

An advertising agency plans a campaign using two media: TV and radio. The target audience is 2,000,000 people. Each TV spot delivers 3 GRPs and costs ₦150,000. Each radio spot delivers 0.8 GRPs and costs ₦30,000. The campaign must achieve at least 1,200 GRPs in total, and the TV contribution must be at least twice the GRPs contributed by radio. Determine the minimum total cost of the campaign and the number of TV and radio spots required.

A. Total cost = ₦54,000,000; TV spots = 260; Radio spots = 500

Correct B. Total cost = ₦55,050,000; TV spots = 267; Radio spots = 500

C. Total cost = ₦54,900,000; TV spots = 267; Radio spots = 495

D. Total cost = ₦55,200,000; TV spots = 268; Radio spots = 500

Correct Answer: B

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Question 9 View Details

A small manufacturing firm needs to raise ₦10,000,000. It can obtain a bank loan at 12\% per annum, a bond issue at 10\% (interest payable annually), and issue new equity with an expected return of 18\% by shareholders. The firm wants the proportion of debt (loan + bond) not to exceed 40\% of total finance, and the proportion of equity to be at least 30\%. After tax, the cost of debt is 8\% (tax rate 33\%). Determine the mix of financing (amount from loan, bond, equity) that minimises the weighted average cost of capital (WACC) while satisfying the constraints. Assume the loan and bond have the same after‑tax cost (8\%). Provide the amounts for each source and the resulting WACC (to two decimal places).

A. Loan = ₦1,000,000; Bond = ₦1,000,000; Equity = ₦8,000,000; WACC = 16.00%

B. Loan = ₦2,500,000; Bond = ₦2,500,000; Equity = ₦5,000,000; WACC = 13.00%

C. Loan = ₦3,000,000; Bond = ₦0; Equity = ₦7,000,000; WACC = 15.00%

Correct D. Loan = ₦2,000,000; Bond = ₦2,000,000; Equity = ₦6,000,000; WACC = 14.00%

Correct Answer: D

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Question 10 View Details

A home‑based baker sells a batch of 24 cupcakes for a total of ₦9,600. The cost of ingredients for the batch is ₦4,800 and a fixed overhead of ₦600 is incurred per batch. What is the profit per cupcake?

A. ₦225

B. ₦150

Correct C. ₦175

D. ₦200

Correct Answer: C

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Question 11 View Details

A shop purchases 120 units of an item at $500$ each. It pays a freight charge equal to 5% of the total purchase cost and a fixed handling fee of $2000$. What is the total amount paid by the shop?

Correct A. 65000

B. 62000

C. 66000

D. 63000

Correct Answer: A

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Question 12 View Details

A company has fixed costs of $150000$ naira per month and a variable cost of $250$ naira per unit. Currently it sells each unit for $400$ naira and sells 1200 units per month. Management is considering raising the selling price to $450$ naira, but expects the sales volume to fall by 15%. Determine which price yields the higher monthly profit and calculate the difference in profit between the two scenarios.

A. Original price yields higher profit; profit difference = ₦24000

Correct B. New price yields higher profit; profit difference = ₦24000

C. New price yields higher profit; profit difference = ₦15000

D. Original price yields higher profit; profit difference = ₦18000

Correct Answer: B

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Question 13 View Details

A retailer experiences an average daily demand of $30$ units for a product. The supplier's lead time is $5$ days. Demand during lead time is normally distributed with a standard deviation of $8$ units. To achieve a 95% service level (z = 1.65), calculate the reorder point and the safety stock required.

Correct A. 163

B. 180

C. 150

D. 190

Correct Answer: A

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Question 14 View Details

An investor holds three stocks: Stock A - 200 shares bought at $1200$ naira each; Stock B - 150 shares bought at $2500$ naira each; Stock C - 100 shares bought at $3800$ naira each. Their current market prices are: Stock A - $1350$ naira, Stock B - $2300$ naira, Stock C - $4100$ naira. The investor expects Stock B's price to rise to $2600$ naira per share. To achieve an overall portfolio return of 12% based on the future market values, how many additional shares of Stock B should the investor purchase now at the current price of $2300$ naira per share?

A. 3825

B. 3525

C. 3675

Correct D. 3725

Correct Answer: D

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Question 15 View Details

A small business records a gross revenue of $500000$ naira. Operating expenses amount to 40% of gross revenue. Interest expense is $20000$ naira. The tax rate is 15% on profit before tax. Calculate the net profit.

A. 205000

B. 280500

Correct C. 238000

D. 255000

Correct Answer: C

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Question 16 View Details

An electronics retailer advertises a television with a marked price of ₦150,000. Under the Consumer Protection Act, the advertised price must not exceed the actual selling price by more than 5\%. The retailer applies a 12\% seasonal discount, then an 8\% loyalty discount on the reduced price, and finally a cash discount of ₦5,000. The cost price of the TV is ₦95,000. a) Determine whether the advertised price complies with the Act. b) If it does not, state the highest advertised price that would be compliant. c) Calculate the retailer's profit on the sale.

A. Non‑compliant; minimum compliant advertised price = ₦122,262; profit = ₦22,500

B. Compliant; minimum compliant advertised price = ₦122,262; profit = ₦21,440

C. Non‑compliant; minimum compliant advertised price = ₦123,500; profit = ₦21,440

Correct D. Non‑compliant; minimum compliant advertised price = ₦122,262; profit = ₦21,440

Correct Answer: D

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Question 17 View Details

A home‑based baker produces 200 loaves of bread each month. Variable cost per loaf is ₦350 and monthly fixed overheads are ₦45,000. Each loaf sells for ₦600. After three months the baker introduces a premium loaf that costs an additional ₦150 in variable cost and sells for ₦900. She plans to allocate 30\% of the monthly production to premium loaves while keeping total output at 200 loaves. i) Find the new break‑even total number of loaves. ii) Compute the increase in monthly profit compared with the original situation.

A. Break‑even quantity = 150 loaves; profit increase = ₦7,500

B. Break‑even quantity = 145 loaves; profit increase = ₦10,200

Correct C. Break‑even quantity = 153 loaves; profit increase = ₦9,000

D. Break‑even quantity = 160 loaves; profit increase = ₦8,500

Correct Answer: C

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Question 18 View Details

A retailer buys smartphones at ₦80,000 each. He wants a gross profit margin of 25\% on the selling price before tax. VAT of 7.5\% is added to the selling price. Loyal customers receive a 10\% discount on the pre‑VAT price. a) What is the final price paid by a loyal customer? b) What is the retailer's actual profit margin as a percentage of the discounted pre‑VAT price (profit divided by the price after discount but before VAT)?

A. Final price = ₦103,200; actual profit margin ≈ 15.0\%

B. Final price = ₦114,667; actual profit margin ≈ 25.0\%

Correct C. Final price = ₦103,200; actual profit margin ≈ 16.7\%

D. Final price = ₦106,667; actual profit margin ≈ 25.0\%

Correct Answer: C

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Question 19 View Details

A wholesaler purchases goods at ₦50 per unit. He sells to retailers with the following discount schedule based on order quantity $Q$: - $0<Q\le 100$: unit price = ₦80 (no discount) - $101\le Q\le 500$: 5\% discount on unit price - $Q>500$: 10\% discount on unit price Monthly fixed costs are ₦30,000. i) What is the smallest order quantity that will give the wholesaler a monthly profit of at least ₦20,000? ii) What profit (or loss) results from an order of 620 units?

A. Minimum order = 2,100 units; profit on 620‑unit order = -₦17,500 (loss)

B. Minimum order = 2,500 units; profit on 620‑unit order = -₦15,000 (loss)

Correct C. Minimum order = 2,273 units; profit on 620‑unit order = -₦16,360 (loss)

D. Minimum order = 2,273 units; profit on 620‑unit order = -₦14,800 (loss)

Correct Answer: C

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Question 20 View Details

A small enterprise plans a project costing ₦5,000,000. It can finance the project with 40\% equity (cost = 12\%), 30\% bank loan at 9\% interest (tax‑deductible, corporate tax = 30\%), and 30\% retained earnings (cost = 8\%). a) Calculate the weighted average cost of capital (WACC). b) Assuming the project generates equal cash inflows at the end of each year for 5 years and using the WACC as discount rate, what is the minimum annual cash inflow required for the project's NPV to be zero? (Ignore depreciation and salvage value.)

Correct A. WACC = 9.09\%; minimum annual cash inflow ≈ ₦1,289,000

B. WACC = 9.50\%; minimum annual cash inflow ≈ ₦1,320,000

C. WACC = 9.09\%; minimum annual cash inflow ≈ ₦1,350,000

D. WACC = 8.75\%; minimum annual cash inflow ≈ ₦1,250,000

Correct Answer: A

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Question 21 View Details

A trader purchases shares of Company X on two occasions. On Day 1 she buys 150 shares at $\text{₦}2,350$ each and pays a brokerage commission of 0.5 % of the transaction value. On Day 2 she buys 200 shares at $\text{₦}2,480$ each with the same commission rate. Later she sells 250 shares at $\text{₦}2,600$ each, again paying a 0.5 % commission on the sale. A capital gains tax of 15 % is charged on the profit (profit before tax = sale proceeds after sale commission minus the cost of the shares sold). Assuming the FIFO method for allocating the cost of the sold shares, calculate the net profit after tax in Naira, rounded to two decimal places.

A. ₦36,000.00

B. ₦35,500.38

Correct C. ₦36,760.38

D. ₦38,200.45

Correct Answer: C

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Question 22 View Details

An exporter receives a payment of US$800,000 for goods sold. The bank deducts a commission of 0.4 % on the amount in dollars before converting the remainder to Naira at the spot rate of $\text{₦}455$ per US$. After conversion, the government imposes an export tax of 4 % on the Naira proceeds. Determine the net amount the exporter receives in Naira, rounded to the nearest kobo.

A. ₦349,440,000

Correct B. ₦348,042,240

C. ₦347,984,000

D. ₦362,544,000

Correct Answer: B

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Question 23 View Details

A warehouse charges a base monthly rent of $\text{₦}150,000$ for up to 500 cubic metres. Each additional cubic metre costs $\text{₦}350$. A handling fee of 2 % of the value of goods stored per month is also applied. A retailer wishes to store 800 cubic metres of goods worth $\text{₦}12,000,000$. The retailer can split the stock between this warehouse (Warehouse A) and a second warehouse (Warehouse B) that charges a flat rate of $\text{₦}200,000$ for up to 600 cubic metres and $\text{₦}300$ for each extra cubic metre, with a handling fee of 1.5 % of the value of goods stored there. Assuming the value of goods is proportional to the volume stored in each warehouse, what allocation of volume between the two warehouses minimises the total monthly cost, and what is that minimum cost? Express the cost in Naira to the nearest thousand.

A. 150 m³ in Warehouse A, 650 m³ in Warehouse B; ₦530,000

B. 250 m³ in Warehouse A, 550 m³ in Warehouse B; ₦560,000

Correct C. 200 m³ in Warehouse A, 600 m³ in Warehouse B; ₦545,000

D. 300 m³ in Warehouse A, 500 m³ in Warehouse B; ₦570,000

Correct Answer: C

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Question 24 View Details

A company imports 10,000 units of a product. The first 4,000 units are subject to a 12 % import duty, the next 3,000 units enjoy a preferential duty rate of 5 % under a trade agreement, and the remaining units are duty‑free. In addition, a customs processing fee of $\text{₦}250$ per unit is levied on all units. If the CIF value per unit is $\text{₦}1,200$, calculate the total amount payable (CIF value + duties + processing fees) in Naira.

A. ₦14,756,000

Correct B. ₦15,256,000

C. ₦15,940,000

D. ₦12,756,000

Correct Answer: B

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Question 25 View Details

A customer deposits $\text{₦}500,000$ in a savings account that offers a nominal annual interest rate of 6 % compounded quarterly. The bank deducts a monthly maintenance fee of $\text{₦}1,200$ at the beginning of each month. What is the account balance after exactly 2 years? Give your answer rounded to two decimal places.

A. ₦532,800.00

B. ₦531,200.00

Correct C. ₦532,432.70

D. ₦563,248.00

Correct Answer: C

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