Practice neco commerce 2025 Past Questions | Edcrib

Question 1 View Details

A retailer manages a single product. Annual demand is $12{,}000$ units, ordering cost per order is $\text{₦}500$, and the holding cost is $\text{₦}2$ per unit per year. Lead time is $10$ days. Daily demand is assumed constant, but demand during lead time varies with a standard deviation of $5$ units per day. For a 95\% service level, use a Z‑value of $1.65$. Each unit occupies $0.02$ m$^3$ of warehouse space and the warehouse can store at most $800$ units (space constraint). The holding cost of $\text{₦}2$ already includes the cost of space. Determine the order quantity that minimises total relevant cost while respecting the storage capacity, and state the reorder point (in units).

A. Order quantity = 2000 units; Reorder point = 350 units

B. Order quantity = 800 units; Reorder point = 360 units

Correct C. Order quantity = 1546 units; Reorder point = 356 units

D. Order quantity = 1200 units; Reorder point = 340 units

Correct Answer: C

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Question 2 View Details

A rectangular warehouse floor measures $60$ m by $40$ m. Identical pallets each measure $1.2$ m (length) by $0.8$ m (width) and are placed with their long side parallel to the $60$ m side. A $3$ m wide aisle must be provided between each row of pallets (rows run across the width). Additionally, safety regulations require that at least $5\%$ of the total floor area remain free as emergency space. What is the maximum number of pallets that can be stored in the warehouse under these conditions?

Correct A. 500

B. 520

C. 540

D. 480

Correct Answer: A

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Question 3 View Details

Three persons A, B and C form a partnership. Their capital contributions are $\text{₦}120{,}000$, $\text{₦}80{,}000$ and $\text{₦}100{,}000$ respectively. The partnership agreement states that a 5\% interest on each partner's capital for the year will be charged, and partner A will receive a fixed salary of $\text{₦}10{,}000$ for management. After these adjustments, the remaining profit will be shared in the ratio of the partners' capital contributions. If the net profit before adjustments is $\text{₦}150{,}000$, determine the amount each partner receives.

A. A: ₦72,000; B: ₦41,333; C: ₦51,667

B. A: ₦70,000; B: ₦36,000; C: ₦45,000

Correct C. A: ₦66,000; B: ₦37,333; C: ₦46,667

D. A: ₦60,000; B: ₦37,333; C: ₦46,667

Correct Answer: C

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Question 4 View Details

An importer brings goods with a CIF value of $\text{₦}2{,}000{,}000$. Customs duty is charged at 5\% on the first $\text{₦}1{,}000{,}000$ and at 10\% on the amount exceeding $\text{₦}1{,}000{,}000$. A surcharge of 2\% is then applied on the total duty. Calculate the total customs duty payable.

Correct A. ₦153,000

B. ₦150,000

C. ₦306,000

D. ₦190,000

Correct Answer: A

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Question 5 View Details

A retailer purchases 200 identical items at a total cost of $\text{₦}480{,}000$ (including freight). The retailer intends to apply a markup of 30\% on the cost price, then offer a seasonal discount of 12\% on the marked price, and finally add a value‑added tax (VAT) of 7.5\% on the discounted price. Determine (a) the final selling price per item that the customer pays, and (b) the retailer's profit per item after all deductions.

A. Final price per item = ₦2,951.52; Profit per item = ₦551.52

B. Final price per item = ₦3,018.60; Profit per item = ₦618.60

Correct C. Final price per item = ₦2,952.02; Profit per item = ₦552.02

D. Final price per item = ₦2,938.79; Profit per item = ₦538.79

Correct Answer: C

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Question 6 View Details

An entrepreneur obtains a loan of $\text{₦}500,000$ from a bank at a nominal rate of 12% per annum compounded semi‑annually. A processing fee of 2% of the loan amount is charged at the start. After exactly 2 years the loan is refinanced with a new loan at 10% per annum compounded quarterly. At the time of refinancing a pre‑payment penalty of 1% of the outstanding principal is imposed. The new loan is taken for a further 1 year. Determine the total amount of interest and charges (processing fee, pre‑payment penalty, and interest on both loans) that the entrepreneur will have paid over the whole borrowing period. Give your answer in naira to two decimal places.

A. 218900.12

B. 215000.00

Correct C. 213736.86

D. 210123.45

Correct Answer: C

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Question 7 View Details

A firm needs $\text{₦}2,000,000$ for expansion. It can raise the required amount by a bank loan at 14% p.a., by issuing 10% preference shares, and by retaining earnings. The cost of retained earnings is taken as 8% p.a. The firm decides to use 40% of the required funds as a loan, 35% as preference shares and the remaining 25% as retained earnings. The loan carries a 2% arrangement fee on the amount borrowed and the preference shares have a flotation cost of 5% of the issue amount. Assuming these fees are one‑time and not recurring, calculate the overall annual cost of finance as a percentage of the total funds required. Express your answer to one decimal place.

A. 10.4

Correct B. 11.1

C. 13.2

D. 12.6

Correct Answer: B

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Question 8 View Details

Three partners A, B and C form a partnership. Partner A contributes $\text{₦}120,000$ for the whole 12 months of the year, partner B contributes $\text{₦}80,000$ for 9 months, and partner C contributes $\text{₦}100,000$ for 6 months. The net profit after tax for the year is $\text{₦}360,000$. Profits are to be divided in proportion to the product of capital contributed and the time (in months) that the capital was invested. Determine the amount of profit each partner receives. Give your answers to two decimal places.

A. A: 187800.00; B: 93900.00; C: 78200.00

Correct B. A: 187826.09; B: 93913.04; C: 78260.87

C. A: 144000.00; B: 96000.00; C: 120000.00

D. A: 160000.00; B: 120000.00; C: 80000.00

Correct Answer: B

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Question 9 View Details

A motor insurance company calculates the premium for a vehicle as follows: (i) a base premium equal to 3% of the insured value; (ii) a loading of 25% added for high‑risk drivers; (iii) a policy tax of 5% applied on the loaded premium; (iv) a discount of 10% granted to customers who have a two‑year no‑claim bonus. For a vehicle with an insured value of $\text{₦}2,500,000$ owned by a high‑risk driver who also enjoys the two‑year no‑claim bonus, determine the final annual premium payable. State your answer in naira to two decimal places.

A. 84375.00

B. 98437.50

Correct C. 88593.75

D. 85050.00

Correct Answer: C

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Question 10 View Details

A whole‑life insurance policy promises a death benefit of $\text{₦}1,000,000$ payable at the end of the year of death. The annual premium is level and payable at the start of each year. Assume the probability of death in year $t$ (for $t=1,2,\dots,30$) is $q_t = 0.0015 + (t-1)\times0.0002$. The effective annual interest rate is 6%. Determine the level annual premium such that the present value of the premiums equals the present value of the expected death benefits over the 30‑year term. Give your answer in naira rounded to the nearest naira.

A. 3500

B. 3320

Correct C. 3364

D. 3400

Correct Answer: C

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Question 11 View Details

A transport company charges a fixed base fare of $\text{₦}500$ plus $\text{₦}120$ per kilometre. In addition, a fuel surcharge equal to 5\\% of the variable charge (the per‑kilometre charge) is added. If a passenger paid a total of $\text{₦}3020$ for a trip, what was the distance travelled in kilometres?

Correct A. 20 km

B. 22 km

C. 25 km

D. 18 km

Correct Answer: A

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Question 12 View Details

A home‑trade retailer purchases 150 units of a product for a total cost of $\text{₦}45,000$. He applies a uniform markup percentage m on the cost to obtain a list price. For orders of 30 units or more he offers a 12\\% discount on the list price and then adds a sales tax of 5\\% on the discounted price. A customer buys exactly 45 units and pays $\text{₦}19,800$ (including tax). Determine the markup percentage m (to one decimal place).

A. 56.3%

B. 61.2%

C. 53.9%

Correct D. 58.7%

Correct Answer: D

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Question 13 View Details

An advertising agency runs a campaign using TV spots and online banner ads. Each TV spot costs $\text{₦}150,000$ and reaches 250,000 viewers. Each week of online banner ads costs $\text{₦}20,000$ and reaches 80,000 unique viewers, but 30\\% of the online audience also watches TV. The client wants a total reach of at least 1,200,000 unique viewers and has a budget of $\text{₦}1,200,000$. Determine the integer numbers of TV spots (t) and weeks of online ads (w) that meet the reach target without exceeding the budget while minimizing total cost. Provide the combination and the total cost.

A. 0 TV spots and 23 weeks of online ads; total cost ₦460,000

B. 2 TV spots and 15 weeks of online ads; total cost ₦600,000

Correct C. 0 TV spots and 22 weeks of online ads; total cost ₦440,000

D. 1 TV spot and 18 weeks of online ads; total cost ₦510,000

Correct Answer: C

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Question 14 View Details

A shop buys an item for $\text{₦}1,200$ and sells it for $\text{₦}1,800$. What is the profit percentage based on the cost price?

A. 40%

Correct B. 50%

C. 33%

D. 60%

Correct Answer: B

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Question 15 View Details

A company has 1,000,000 shares trading at $\text{₦}250$ each. It announces a 1‑for‑5 rights issue at a subscription price of $\text{₦}180$ per new share. The annual dividend before the rights issue is $\text{₦}30$ per share.\n(a) Compute the theoretical ex‑rights price per share after the rights issue.\n(b) Determine the dividend yield (percentage) based on the ex‑rights price.\n(c) An investor holds 200 shares before the rights issue and fully subscribes to his rights. What is his total amount invested in those shares after the rights issue and his average cost per share?

A. a) ₦242.00 per share; b) 12.40%; c) total investment ₦58,000 and average cost ₦242.00 per share

B. a) ₦240.00 per share; b) 12.50%; c) total investment ₦57,600 and average cost ₦240.00 per share

Correct C. a) ₦238.33 per share; b) 12.59%; c) total investment ₦57,200 and average cost ₦238.33 per share

D. a) ₦235.00 per share; b) 12.77%; c) total investment ₦56,800 and average cost ₦235.00 per share

Correct Answer: C

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Question 16 View Details

An importer forecasts an annual demand of $12{,}000$ units of product X. The ordering cost per order is $\text{₦}500$. The unit cost is $\text{₦}200$ per unit, and the holding cost is $20\%$ of the unit cost per year. The warehouse can store at most $1{,}500$ units. If an order quantity exceeds $800$ units, the supplier gives a $5\%$ discount on the unit cost for the whole order. Determine the order quantity that minimises the total relevant cost (ordering plus holding) while respecting the storage limit and the discount condition, and compute the minimum total relevant cost (in ₦).

A. Order quantity = 600 units; Minimum total relevant cost ≈ ₦22,100

B. Order quantity = 800 units; Minimum total relevant cost ≈ ₦22,500

C. Order quantity = 500 units; Minimum total relevant cost ≈ ₦21,500

Correct D. Order quantity = 548 units; Minimum total relevant cost ≈ ₦21,909

Correct Answer: D

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Question 17 View Details

An importer wants to bring $10{,}000$ kg of cocoa beans into Nigeria. Supplier A quotes a FOB price of $\$2.50$ per kg and freight‑insurance of $\$0.30$ per kg. The customs ad‑valorem tariff on cocoa beans is $5\%$ of the CIF value. The exchange rate is $\text{₦}460$ per US\$. Supplier B offers a CIF price of $\$2.90$ per kg, but the duty is a specific charge of $\text{₦}150$ per kg. A surcharge of $2\%$ is applied on the total customs duty for both suppliers. Calculate the total landed cost in Naira for each supplier, identify the cheaper supplier, and state the percentage saving of the cheaper supplier relative to the more expensive one.

Correct A. Supplier A total landed cost = ₦13,536,880; Supplier B total landed cost = ₦14,870,000; Cheaper = Supplier A; Saving ≈ 8.96%

B. Supplier A total landed cost = ₦13,536,880; Supplier B total landed cost = ₦14,870,000; Cheaper = Supplier B; Saving ≈ 8.96%

C. Supplier A total landed cost = ₦13,536,880; Supplier B total landed cost = ₦14,870,000; Cheaper = Supplier A; Saving ≈ 9.5%

D. Supplier A total landed cost = ₦13,600,000; Supplier B total landed cost = ₦14,800,000; Cheaper = Supplier A; Saving ≈ 8.11%

Correct Answer: A

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Question 18 View Details

A consumer buys a refrigerator advertised to consume $150$ kWh per year, paying $\text{₦}120{,}000$. The warranty lasts 3 years. After one year the actual consumption is measured at $210$ kWh per year. Electricity costs $\text{₦}45$ per kWh. Under the Consumer Protection Act, the consumer may claim compensation equal to the excess electricity cost incurred due to the misrepresentation, plus simple interest at $10\%$ per annum on the compensation amount, calculated from the date of purchase to the end of the warranty period. Determine the total compensation payable at the end of the warranty.

A. ₦9,720

B. ₦8,910

Correct C. ₦10,530

D. ₦8,100

Correct Answer: C

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Question 19 View Details

Within a manufacturing firm, the daily production report follows this chain: the shift supervisor prepares a written report and emails it to the production manager; the production manager verbally informs the logistics officer during the morning briefing; the logistics officer then updates the inventory system. An audit revealed frequent discrepancies because the logistics officer often missed the updates. Identify the primary communication barrier in this chain, explain why it leads to errors, and recommend a specific change to the communication process that would eliminate the barrier.

A. Barrier: over‑reliance on written reports. It leads to delays because information is not communicated promptly. Recommendation: hold a brief daily verbal meeting between the production manager and logistics officer to convey updates immediately.

Correct B. Barrier: lack of feedback / one‑way verbal communication. It leads to missed or misunderstood information because there is no record or acknowledgment. Recommendation: use a direct electronic update (e.g., a shared digital form that automatically updates the inventory system and provides an acknowledgment), thereby creating a two‑way, traceable communication channel.

C. Barrier: language differences among staff. It leads to misinterpretation of instructions because terms are not uniformly understood. Recommendation: provide multilingual translation guides for all communications to ensure clarity.

D. Barrier: excessive communication channels causing information overload. It leads to confusion and missed updates due to too many messages. Recommendation: consolidate all updates into a single standardized email thread that all parties monitor.

Correct Answer: B

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Question 20 View Details

A company's shares currently trade at $\text{₦}1{,}200$ per share. It is expected to pay a dividend of $\text{₦}90$ next year, and dividends are projected to grow at a constant rate. Investors require a return of $12\%$. The company announces a 2‑for‑1 stock split next month. (a) Determine the implied constant growth rate of dividends. (b) Compute the theoretical ex‑split price immediately after the split. (c) Assuming the dividend per share is halved by the split, calculate the dividend yield after the split.

Correct A. (a) 4.5% growth rate; (b) ex‑split price = ₦600; (c) dividend yield after split = 7.5%

B. (a) 4.5% growth rate; (b) ex‑split price = ₦550; (c) dividend yield after split = 8.5%

C. (a) 4.0% growth rate; (b) ex‑split price = ₦580; (c) dividend yield after split = 8.0%

D. (a) 5.0% growth rate; (b) ex‑split price = ₦620; (c) dividend yield after split = 7.0%

Correct Answer: A

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Question 21 View Details

A retailer marks a TV at ₦120,000. The retailer offers a 15% discount to members, then an additional 5% discount on the reduced price for a promotional sale. After discounts, a value‑added tax (VAT) of 7.5% is added. The retailer also charges a mandatory extended warranty costing 8% of the pre‑VAT price. A consumer purchases the TV, pays the total amount, and later returns it within the return period. The store refunds the purchase price but deducts a restocking fee equal to 10% of the amount actually paid (including VAT and warranty). If the retailer's cost price for the TV was ₦78,000, determine the retailer's net profit or loss on this transaction.

Correct A. -66,749.91

B. -66,749.00

C. -65,749.91

D. -67,749.91

Correct Answer: A

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Question 22 View Details

A telecom company offers a 24‑month contract for a smartphone at a monthly subscription of ₦4,500. The contract includes a one‑time activation fee of ₦2,500 and a mandatory insurance premium of 2% of the monthly fee added each month. The contract states that if the consumer terminates the agreement before completing 12 months, an early termination penalty equal to 25% of the total remaining monthly fees (excluding insurance) is charged. The consumer decides to cancel after 8 months. Determine the total amount the consumer has paid up to cancellation, including all fees and the early termination penalty, and also compute the average monthly cost incurred over the 8 months.

A. Total paid: 66,220; Average monthly cost: 8,277.5

Correct B. Total paid: 57,220; Average monthly cost: 7,152.5

C. Total paid: 57,580; Average monthly cost: 7,197.5

D. Total paid: 56,500; Average monthly cost: 7,062.5

Correct Answer: B

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Question 23 View Details

In a business, a manager sends a memo to three department heads via email. The email system introduces a processing delay of 2 seconds per recipient and a transmission delay of 0.5 seconds per kilobyte. The memo is 12 kilobytes. After receiving the memo, each department head must acknowledge receipt, which takes 1 second of reading time plus a 0.2‑second response preparation time, and the acknowledgment email (0.5 KB) incurs the same transmission delay but no processing delay. All acknowledgments are sent simultaneously. Calculate the total time elapsed from the moment the manager clicks ‘send' until the manager receives the last acknowledgment.

Correct A. 13.45 seconds

B. 12.95 seconds

C. 14.10 seconds

D. 13.85 seconds

Correct Answer: A

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Question 24 View Details

Identify the three main types of economic resources (factors of production) and give one example for each.

A. Land - machinery; Labor - farmland; Capital - factory workers

Correct B. Land - farmland; Labor - factory workers; Capital - machinery

C. Land - factory workers; Labor - patents; Capital - farmland

D. Land - factory workers; Labor - machinery; Capital - farmland

Correct Answer: B

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Question 25 View Details

A wholesaler purchases a product from a manufacturer at ₦1,200 per unit. Fixed monthly overheads (rent, salaries, utilities) amount to ₦150,000. The wholesaler sells to retailers with a base selling price of ₦1,800 per unit. However, for orders of 500 units or more, the wholesaler offers a 10% discount on the base price. The wholesaler aims to earn a monthly profit of ₦80,000. Assuming the wholesaler expects to sell exactly 500 units in a month, determine the minimum base selling price (before discount) that will allow the target profit, and state whether the discount will be applied.

A. Base price ≈ 1,750.00 ₦; discount applied

B. Base price ≈ 1,800.00 ₦; discount applied

C. Base price ≈ 1,900.00 ₦; discount not applied

Correct D. Base price ≈ 1,844.44 ₦; discount applied

Correct Answer: D

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