Neco Model Questions Vol1 2019 Commerce Question 12

Practice objective / multiple choice question 12 from the 2019 Neco Model Questions Vol1 Commerce examination.

Neco Model Questions Vol1 2019 Commerce Objective / Multiple Choice Medium Difficulty
Question 12 NECO_MODEL_QUESTIONS_VOL1 • 2019 • COMMERCE • objective

An insurance company sets a base premium of ₦2,500 per policy. A risk loading of \(12\%\) is added, then an early‑payment discount of \(5\%\) is applied, and finally a value‑added tax of \(7.5\%\) is charged on the discounted premium. (i) Determine the final premium per policy. (ii) If the company has fixed administrative expenses of ₦50,000 and aims for a profit of ₦180,000, what is the minimum number of policies that must be sold?

Answer Options

A. Final premium = ₦3,010; minimum policies = 77
B. Final premium = ₦2,553.13; minimum policies = 91
Correct Answer C. Final premium = ₦2,859.5; minimum policies = 81
D. Final premium = ₦2,660; minimum policies = 87
Correct Answer
C
Correct Option:
Final premium = ₦2,859.5; minimum policies = 81

About This Question

This is Neco Model Questions Vol1 2019 Commerce Question 12. It is one of the objective questions from the 2019 Neco Model Questions Vol1 Commerce examination.

Difficulty level: Medium .

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