neco model questions vol1 2025 commerce | Essay

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Question 1 View Details
Commerce is the activity that brings together producers and consumers for the exchange of goods and services. Using this definition, answer the following:
Question Parts
(a)
Define commerce in your own words.
(b)
State the three main functions of commerce and briefly explain how each function contributes to economic development in Nigeria.
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Question 2 View Details
Country X engages in international trade as follows: it imports 2,000 tonnes of wheat at $150 per tonne and exports 1,200 tonnes of cocoa at $250 per tonne. The prevailing exchange rate is ₦400 per US$1. The government imposes a 10 % tariff on wheat imports and offers a 5 % subsidy on cocoa exports.
Question Parts
(a)
Calculate the total value of wheat imports in Naira (₦) before the tariff and after the tariff is applied.
(b)
Determine the total value of cocoa exports in Naira before the subsidy and after the subsidy is applied.
(c)
Calculate the trade balance (exports − imports) in Naira after the tariff and subsidy have been applied. State whether the balance shows a surplus or a deficit.
(d)
If the exchange rate appreciates to ₦360 per US$1, recompute the trade balance after applying the same tariff and subsidy. Explain briefly how the appreciation of the Naira affects the trade balance.
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Question 3 View Details
A small town in Nigeria has three main market centres – Market A, Market B and Market C. The weekly average quantities of rice sold in each market are: - Market A: 1,200 kg - Market B: 1,500 kg - Market C: 800 kg The average market price per kilogram of rice is ₦250 in Market A, ₦260 in Market B and ₦255 in Market C. Answer the following:
Question Parts
(a)
Calculate the total quantity of rice sold in the town each week.
(b)
Determine the weighted average price per kilogram of rice for the whole town.
(c)
Discuss two advantages and two disadvantages of having multiple market centres for the same commodity within a town.
(d)
Suggest two strategies that local traders could adopt to increase the overall revenue from rice sales and justify each strategy.
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Question 4 View Details
Nigeria imports a specific electronic component from Country X. The import data for the last three years are as follows: Year 1: 5,000 units, unit cost US$12, exchange rate ₦410/US$, import duty 5%, shipping 8% of CIF value. Year 2: 6,000 units, unit cost US$13, exchange rate ₦415/US$, same duty and shipping rates. Year 3: 5,500 units, unit cost US$14, exchange rate ₦420/US$, same duty and shipping rates. CIF (Cost, Insurance, Freight) value is the product of quantity, unit cost and the prevailing exchange rate. Answer the following:
Question Parts
(a)
Calculate the total cost in Naira for each year, including duty and shipping.
(b)
Determine the average annual growth rate in total import cost over the three‑year period.
(c)
Discuss two macro‑economic implications of the rising import cost for Nigeria’s balance of payments.
(d)
Suggest two policy measures the government could adopt to reduce the pressure on foreign‑exchange reserves arising from such imports, providing justification for each.
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Question 5 View Details
A retailer purchases two products, A and B, for resale in a shop. The data for the month are as follows: - Purchase price per unit: Product A = ₦2,000; Product B = ₦1,500. - Selling price per unit: Product A = ₦3,000; Product B = ₦2,200. - Fixed monthly costs (rent, salaries, utilities) = ₦150,000. - Expected sales volume: 200 units of A and 300 units of B. - The retailer offers a 10 % discount on the selling price of Product A when a customer buys more than 20 units in a single purchase. Answer the following questions.
Question Parts
(a)
Calculate the markup percentage on each product.
(b)
Determine the break‑even quantity for each product if each product is sold separately, i.e. when its contribution alone must cover the fixed monthly costs.
(c)
If the 10 % discount on Product A is applied, calculate the new break‑even quantity for Product A under the discount condition.
(d)
Discuss two advantages and two disadvantages of using the discount policy for Product A in terms of profitability and customer behaviour.
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Question 6 View Details
A wholesaler buys a commodity from a manufacturer and sells it to retailers. The following information applies: - Purchase price per unit from the manufacturer = ₦1,800. - Transport cost per unit = ₦120. - Storage cost per unit per month = ₦30. - Average inventory period for each unit = 2 months. - Fixed monthly costs (warehouse rent, staff salaries, utilities) = ₦200,000. - Current selling price per unit to retailers = ₦2,500. - The wholesaler offers trade credit: payment is due in 30 days, but a 2 % discount is granted if payment is made within 10 days. The wholesaler expects to sell 5,000 units each month. Answer the following questions.
Question Parts
(a)
Calculate the total variable cost per unit, including purchase price, transport, and storage for the average inventory period.
(b)
Determine the gross profit margin percentage based on the current selling price.
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Question 7 View Details
A group of three entrepreneurs intends to start a technology consultancy firm in Lagos. They are debating whether to register the business as a partnership or as a private limited liability company (Ltd).
Question Parts
(a)
Explain the key legal differences between a partnership and a private limited liability company in Nigeria.
(b)
Discuss two advantages and two disadvantages of each form of organisation for the proposed technology consultancy.
(c)
Given the nature of the consultancy (high‑tech services, need for credibility with corporate clients, and intention to attract venture capital in the future), recommend which form of organisation is more suitable and justify your recommendation with reference to at least three of the points discussed above.
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Question 8 View Details
Alpha Manufacturing Plc is planning to expand its production capacity by constructing a new plant. The management is evaluating various sources of finance to fund the expansion.
Question Parts
(a)
Identify three internal sources and three external sources of finance that Alpha Manufacturing could consider for the expansion.
(b)
For each of the six sources listed in part (a), discuss one advantage and one disadvantage in the context of a manufacturing expansion project.
(c)
Assume Alpha Manufacturing decides to raise the required N150 million through the following mix: 40 % bank loan at 12 % per annum, 30 % issuance of ordinary shares with an implied cost of 15 % (reflecting expected return demanded by shareholders), and 30 % corporate bonds at 10 % per annum. Calculate the weighted average cost of capital (WACC) for this financing mix and comment on whether the resulting cost is acceptable for a project that is expected to generate a return of 14 % per annum.
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