POST UTME ABU 2018 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A firm is considering investing in a new project that has a 20% chance of generating a return of ₦1,000,000, and a 80% chance of generating a return of ₦0. If the firm's cost of capital is 10%, what is the expected return on investment (ROI) for this project?
A. 10%
B. 20%
C. 30%
D. 40%
Question 2
A sole trader is considering expanding their business by forming a partnership. What are the main advantages of forming a partnership?
A. Increased capital, shared risk, and expertise
B. Reduced tax liability, increased flexibility
C. Improved reputation, increased customer base
D. None of the above
Question 3
In a perfectly competitive market, the law of diminishing marginal utility implies that as the quantity of a good consumed increases, the marginal utility derived from each additional unit of the good will eventually decrease. However, this does not necessarily mean that the total utility derived from the good will also decrease. Explain why.
A. The total utility derived from the good will always decrease as the quantity consumed increases.
B. The total utility derived from the good will increase as the quantity consumed increases, but at a decreasing rate.
C. The total utility derived from the good will remain constant as the quantity consumed increases.
D. The total utility derived from the good will decrease as the quantity consumed increases, but only if the good is a luxury good.
Question 4
A marketing manager wants to increase sales by 20% within the next quarter. If the current sales are ₦1,000,000, what is the target sales figure?
A. ₦1,200,000
B. ₦1,200,500
C. ₦1,200,000
D. ₦1,200,500
Question 5
A consumer's indifference curves are given by U(x,y) = 2x + 3y. If the consumer's budget constraint is given by x + 2y = 10, find the consumer's optimal consumption bundle.
A. (x,y) = (5, 2.5)
B. (x,y) = (3, 4)
C. (x,y) = (2, 5)
D. (x,y) = (1, 6)
Question 6
A company is considering two marketing strategies: a mass marketing approach or a niche marketing approach. Which strategy is more likely to result in higher customer satisfaction?
A. Mass marketing
B. Niche marketing
C. Both strategies are equally effective
D. Neither strategy is effective
Question 7
A company has a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. If the company issues 20,000 shares at a premium of ₦5 per share, what is the total amount received from the issue of shares?
A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦350,000
Question 8
A company is considering investing in a new insurance policy. The policy has a high premium, but it is expected to reduce the company's risk. What is the main advantage of this investment?
A. Reduced risk
B. Increased risk
C. Increased profits
D. Reduced profits
Question 9
In a sole trader business, what is the primary advantage of using a separate business bank account?
A. Easy accounting and tax compliance
B. Separation of personal and business finances
C. Increased credibility with suppliers and customers
D. Reduced risk of business failure
Question 10
A company has a policy of paying its employees a bonus for every year they work for the company. What is the main advantage of this policy?
A. Increased employee morale
B. Increased employee turnover
C. Increased profits
D. Reduced profits
Question 11
A firm is considering investing in a new project that has a 30% chance of generating a return of ₦2,000,000, and a 70% chance of generating a return of ₦0. If the firm's cost of capital is 12%, what is the expected return on investment (ROI) for this project?
A. 12%
B. 15%
C. 18%
D. 20%
Question 12
A company has a production cost of ₦100 per unit and a selling price of ₦150 per unit. What is the profit per unit?
A. ₦50
B. ₦75
C. ₦100
D. ₦125
Question 13
A firm is considering exporting its product to a foreign market. The firm's production costs are as follows: labor costs = ₦100 per unit, raw materials costs = ₦50 per unit, and transportation costs = ₦20 per unit. If the firm sells its product for ₦200 per unit in the foreign market, what is the firm's profit per unit?
A. ₦30
B. ₦40
C. ₦50
D. ₦60
Question 14
A company is considering two different production strategies for its new product. Strategy A involves a high upfront cost of ₦1,500,000, but is expected to generate ₦3,000,000 in revenue over the next year. Strategy B involves a lower upfront cost of ₦1,000,000, but is expected to generate ₦2,000,000 in revenue over the next year. Assuming a 10% discount rate, which strategy is more profitable?
A. Strategy A
B. Strategy B
C. Both strategies are equally profitable
D. Neither strategy is profitable
Question 15
A firm is producing a good with the following cost function: C(q) = 2q^2 + 10q + 100. If the firm is currently producing 10 units of the good, what is the marginal cost of producing the 11th unit?
A. ₦20
B. ₦30
C. ₦40
D. ₦50

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