Practice post utme achievers university commerce 2021 Past Questions

Question 1

In a sole trader business, what is the primary advantage of using a sole proprietorship structure?

A. Limited liability

B. Unlimited liability

Correct C. Easy to set up

D. Tax benefits

Correct Answer: C

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Question 2

A company has a capital structure consisting of 60% equity and 40% debt. If the company's cost of equity is 12% and the cost of debt is 6%, what is the company's weighted average cost of capital (WACC)?

A. 8%

Correct B. 9%

C. 10%

D. 11%

Correct Answer: B

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Question 3

A consumer purchases a product for ₦1,000 and pays a 10% sales tax. If the consumer returns the product and receives a refund of ₦900, what is the refund amount after deducting the sales tax?

Correct A. ₦900

B. ₦950

C. ₦1,000

D. ₦1,050

Correct Answer: A

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Question 4

A company exports goods worth ₦5 million to a foreign country. If the exchange rate is 1 USD = ₦500, what is the value of the export in USD?

A. ₦2,500

Correct B. ₦5,000

C. ₦10,000

D. ₦20,000

Correct Answer: B

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Question 5

A sole trader business has a cash balance of ₦100,000 and accounts payable of ₦50,000. If the business receives a cash inflow of ₦20,000 and pays a cash outflow of ₦10,000, what is the new cash balance?

A. ₦120,000

Correct B. ₦110,000

C. ₦100,000

D. ₦90,000

Correct Answer: B

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Question 6

A firm specializes in producing a single product, and its production function is given by the equation ( Q = 100L^0.5K^0.25 ), where Q is the quantity produced, L is labor, and K is capital. If the firm's current labor and capital inputs are 100 units and 400 units, respectively, what is the marginal product of labor?

Correct A. 50

B. 100

C. 200

D. 250

Correct Answer: A

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Question 7

A company has two production facilities, A and B, with the following production functions: ( Q_A = 100L_A^0.5K_A^0.25 ) and ( Q_B = 200L_B^0.5K_B^0.25 ). If the firm's current labor and capital inputs for facility A are 100 units and 400 units, respectively, and for facility B are 50 units and 200 units, respectively, what is the total output of the firm?

A. 5000

Correct B. 6000

C. 7000

D. 8000

Correct Answer: B

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Question 8

A firm has a production function given by the equation ( Q = 100L^0.5K^0.25 ), where Q is the quantity produced, L is labor, and K is capital. If the firm's current labor and capital inputs are 100 units and 400 units, respectively, and the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the total cost of production?

A. ₦100,000

B. ₦120,000

Correct C. ₦150,000

D. ₦180,000

Correct Answer: C

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Question 9

A company has two production facilities, A and B, with the following production functions: ( Q_A = 100L_A^0.5K_A^0.25 ) and ( Q_B = 200L_B^0.5K_B^0.25 ). If the firm's current labor and capital inputs for facility A are 100 units and 400 units, respectively, and for facility B are 50 units and 200 units, respectively, what is the marginal product of capital for facility B?

A. 12.5

Correct B. 25

C. 50

D. 100

Correct Answer: B

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Question 10

A firm has a production function given by the equation ( Q = 100L^0.5K^0.25 ), where Q is the quantity produced, L is labor, and K is capital. If the firm's current labor and capital inputs are 100 units and 400 units, respectively, and the price of labor is ₦100 per unit and the price of capital is ₦200 per unit, what is the total revenue of the firm?

A. ₦150,000

B. ₦180,000

C. ₦200,000

Correct D. ₦250,000

Correct Answer: D

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Question 11

A sole trader's business is considered a separate legal entity from its owner. Discuss the implications of this separation on the owner's personal liability.

A. The owner's personal assets are protected from business debts.

Correct B. The owner's personal assets are liable for business debts.

C. The business is liable for the owner's personal debts.

D. The owner's personal debts are not affected by the business.

Correct Answer: B

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Question 12

A company has a warehouse with a capacity of 10,000 units. The current stock level is 8,000 units. If the company receives a shipment of 2,000 units, what is the new stock level?

Correct A. 6000

B. 8000

C. 10000

D. 12000

Correct Answer: A

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Question 13

A firm specializes in producing two products: X and Y. The production process for X requires 2 hours of labor and 1 hour of machine time, while the production process for Y requires 1 hour of labor and 2 hours of machine time. If the firm has 8 hours of labor and 6 hours of machine time available, how many units of X and Y should it produce to maximize profit?

Correct A. X = 4, Y = 2

B. X = 2, Y = 4

C. X = 3, Y = 3

D. X = 1, Y = 5

Correct Answer: A

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Question 14

A company uses a marketing mix of 4P's (Product, Price, Place, Promotion) to promote its product. Which of the following is NOT a characteristic of the Product element?

A. Quality

B. Design

C. Packaging

Correct D. Warranty

Correct Answer: D

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Question 15

A consumer protection law requires businesses to provide a 30-day cooling-off period for customers to return goods. Which of the following is a consequence of this law?

A. Increased sales for businesses

B. Reduced returns for customers

Correct C. Protection for consumers from defective goods

D. Increased costs for businesses

Correct Answer: C

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Question 16

A company's marketing strategy involves creating a new product line that caters to a specific demographic. The product line is designed to appeal to the 'green' consumer, who prioritizes environmental sustainability. Which of the following marketing mix elements is most relevant to this strategy?

Correct A. Product

B. Price

C. Promotion

D. Place

Correct Answer: A

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Question 17

A firm is considering entering a new market. The market research indicates that the demand for the product is price-elastic. What is the implication of this for the firm's pricing strategy?

A. The firm should set a high price to maximize profits.

Correct B. The firm should set a low price to increase market share.

C. The firm should use a penetration pricing strategy.

D. The firm should use a skimming pricing strategy.

Correct Answer: B

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Question 18

A company is considering outsourcing its production to a foreign country. The cost of production in the foreign country is lower than in the home country. What is the implication of this for the company's decision?

Correct A. The company should outsource production to the foreign country.

B. The company should not outsource production to the foreign country.

C. The company should consider other factors such as quality and logistics.

D. The company should consider other factors such as political risk and currency fluctuations.

Correct Answer: A

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Question 19

A firm is considering using a just-in-time (JIT) inventory system. What is the primary benefit of this system?

A. Reduced inventory costs

B. Improved quality control

C. Increased flexibility in production

Correct D. Reduced lead times

Correct Answer: D

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Question 20

A company is considering using a total quality management (TQM) approach to improve its quality. What is the primary goal of TQM?

A. To reduce costs

Correct B. To improve quality

C. To increase productivity

D. To reduce lead times

Correct Answer: B

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Question 21

The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity cost. Which of the following is a correct example of comparative advantage?

A. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 100 units of good Y.

Correct B. Country A produces 100 units of good X and 50 units of good Y, while Country B produces 50 units of good X and 50 units of good Y.

C. Country A produces 100 units of good X and 100 units of good Y, while Country B produces 50 units of good X and 50 units of good Y.

D. Country A produces 50 units of good X and 100 units of good Y, while Country B produces 100 units of good X and 50 units of good Y.

Correct Answer: B

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Question 22

A company is considering two different marketing strategies for its new product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. Which of the following is a correct example of a marketing mix?

Correct A. Product, Price, Place, Promotion

B. Product, Price, Place, Packaging

C. Product, Price, Place, People

D. Product, Price, Place, Process

Correct Answer: A

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Question 23

A company has a policy of paying its employees a fixed salary of ₦50,000 per month, plus a bonus of 10% of their monthly sales. If an employee's monthly sales are ₦200,000, what is their total monthly income?

A. ₦60,000

Correct B. ₦65,000

C. ₦70,000

D. ₦75,000

Correct Answer: B

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Question 24

A company is considering investing in a new project that has a net present value (NPV) of ₦1,000,000. If the company's cost of capital is 10%, what is the present value of the project?

Correct A. ₦900,000

B. ₦1,000,000

C. ₦1,100,000

D. ₦1,200,000

Correct Answer: A

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Question 25

A company has a policy of paying its employees a fixed salary of ₦50,000 per month, plus a bonus of 10% of their monthly sales. If an employee's monthly sales are ₦200,000, what is their total monthly income?

A. ₦60,000

Correct B. ₦65,000

C. ₦70,000

D. ₦75,000

Correct Answer: B

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