Neco Model Questions Vol1 2017 Commerce Question 4

Practice essay / theory question 4 from the 2017 Neco Model Questions Vol1 Commerce examination. This question covers Foreign Trade, Business Mathematics .

Neco Model Questions Vol1 2017 Commerce Essay / Theory
Topics: Foreign Trade Business Mathematics
Question 4 NECO_MODEL_QUESTIONS_VOL1 • 2017 • COMMERCE • essay

A Nigerian exporter sells cocoa beans to an overseas buyer. The transaction involves foreign exchange, export duty and shipping costs.

Question Parts

( a )
The exporter sells 5,000 kg of cocoa beans at US$2.50 per kg. With an exchange rate of ₦460 per US$, calculate the FOB value in Naira and the net revenue after deducting export duty (5 % of FOB), shipping & insurance of ₦150,000 and processing cost of ₦200,000.
( b )
State the profit earned from the transaction, assuming the only costs are the export duty, shipping & insurance and processing cost given above.
( c )
If the exchange rate rises to ₦480 per US$, recompute the FOB value in Naira, the net revenue and profit. Comment briefly on how exchange‑rate fluctuations affect the exporter’s earnings.

Detailed Solution & Marking Scheme

Get the step-by-step solution, key points required by examiners and detailed marking guidance through the Edcrib AI Tutor.

Reveal Answer

About This Question

This is Neco Model Questions Vol1 2017 Commerce Question 4. It is one of the essay questions from the 2017 Neco Model Questions Vol1 Commerce examination.

The question covers Foreign Trade, Business Mathematics .

View More Neco Model Questions Vol1 2017 Commerce Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support