Neco 2025 Commerce Question 8
Practice essay / theory question 8 from the 2025 Neco Commerce examination. This question covers Sources of Finance .
ABC Enterprises is a start‑up that manufactures solar‑powered water pumps. The management is preparing a five‑year financial plan and is evaluating three potential sources of finance: (i) a bank term loan of ₦20,000,000 at 12 % per annum payable annually, (ii) issuance of 2,000 debentures at ₦10,000 each bearing 10 % interest, and (iii) equity financing by issuing 1,500 ordinary shares at ₦15,000 each. The company expects to generate a net profit before interest and tax (EBIT) of ₦8,000,000 each year and a corporate tax rate of 30 %.
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This is Neco 2025 Commerce Question 8. It is one of the essay questions from the 2025 Neco Commerce examination.
The question covers Sources of Finance .
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