POST UTME AFE BABALOLA UNIVERSITY 2021 Commerce | Objective

Are you preparing for POST UTME AFE BABALOLA UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2021 Commerce (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a sole trader business, what is the primary advantage of using a sole proprietorship structure?
A. Limited liability
B. Easy setup and maintenance
Correct C. Flexibility in decision-making
D. Tax benefits

Correct Answer: C

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Question 2
A company is considering the purchase of a new warehouse. The company's accountant has estimated the cost of the warehouse to be ₦1,500,000. However, the company's manager has estimated the cost to be ₦1,200,000. What is the most likely reason for the discrepancy in the estimates?
A. The accountant has overestimated the cost of the warehouse
Correct B. The manager has underestimated the cost of the warehouse
C. The company's financial reports are inaccurate
D. The company's budget is insufficient

Correct Answer: B

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Question 3
A consumer has purchased a product from a company, but the product has a defect. The consumer is seeking compensation from the company. What is the primary legal principle that the consumer is relying on?
A. The principle of caveat emptor
Correct B. The principle of strict liability
C. The principle of negligence
D. The principle of breach of contract

Correct Answer: B

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Question 4
A company is considering the use of a just-in-time (JIT) inventory system. What is the primary advantage of using a JIT system?
A. Reduced inventory costs
B. Improved product quality
C. Increased efficiency in production
Correct D. Reduced lead times

Correct Answer: D

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Question 5
A company is considering the export of a product to a foreign country. What is the primary consideration that the company should take into account?
A. The company's profit margins
B. The company's market share
C. The company's competitive advantage
Correct D. The foreign country's trade regulations

Correct Answer: D

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Question 6
In a sole trade business, what is the primary advantage of adopting a sole proprietorship structure?
A. Limited liability
B. Easy to set up
Correct C. Flexibility in decision-making
D. Tax benefits

Correct Answer: C

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Question 7
A company has a share capital of ₦5 million, divided into 500,000 ordinary shares of ₦10 each. If the company issues 200,000 shares to the public, what is the amount of share capital raised?
A. ₦1 million
Correct B. ₦2 million
C. ₦3 million
D. ₦4 million

Correct Answer: B

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Question 8
A consumer purchases a product with a price of ₦10,000. If the product is subject to a 10% discount, what is the amount of discount?
Correct A. ₦1,000
B. ₦1,500
C. ₦2,000
D. ₦2,500

Correct Answer: A

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Question 9
A company has a production capacity of 10,000 units per day. If the company operates for 20 days, what is the total production?
Correct A. 200,000 units
B. 250,000 units
C. 300,000 units
D. 350,000 units

Correct Answer: A

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Question 10
A foreign trade agreement between two countries involves the exchange of goods worth 100 million. If the exchange rate is 1 USD = ₦500, what is the equivalent value in Nigerian Naira?
A. ₦50 billion
Correct B. ₦60 billion
C. ₦70 billion
D. ₦80 billion

Correct Answer: B

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Question 11
A firm's production function is given by Q = 2L^0.5H^0.5, where Q is the quantity produced, L is the number of labor hours, and H is the number of units of capital. If the firm wants to produce 100 units of output, and it has 16 labor hours available, how many units of capital should it hire?
A. 8
B. 16
Correct C. 32
D. 64

Correct Answer: C

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Question 12
A company is considering two different marketing strategies: Strategy A, which involves a 10% increase in advertising expenditure, and Strategy B, which involves a 20% increase in sales force size. If the company's current advertising expenditure is ₦1,000,000 and its current sales force size is 100 people, which strategy would result in a higher increase in sales?
Correct A. Strategy A
B. Strategy B
C. Both strategies would result in the same increase in sales
D. Neither strategy would result in an increase in sales

Correct Answer: A

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Question 13
A firm is considering exporting its product to a foreign market. The firm's current price is ₦100 per unit, and the foreign market price is 20 per unit. If the exchange rate is 1 USD = 500 NGN, what is the firm's profit per unit if it exports the product?
Correct A. ₦80
B. ₦120
C. ₦160
D. ₦200

Correct Answer: A

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Question 14
A company is considering investing in a new production facility. The facility will cost ₦500 million to build and will generate an annual profit of ₦200 million. If the company's cost of capital is 10%, what is the net present value (NPV) of the investment?
Correct A. ₦300 million
B. ₦400 million
C. ₦500 million
D. ₦600 million

Correct Answer: A

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Question 15
A firm is considering purchasing a new machine that will cost ₦1,000,000. The machine will have a useful life of 5 years and will generate an annual profit of ₦200,000. If the firm's cost of capital is 15%, what is the payback period of the investment?
A. 2 years
Correct B. 3 years
C. 4 years
D. 5 years

Correct Answer: B

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Question 16
A sole trader's business is considered a separate legal entity from its owner. True or False?
A. True
Correct B. False
C. Depends on the jurisdiction
D. Not applicable

Correct Answer: B

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Question 17
A company's articles of association can be amended by a simple majority vote of shareholders. True or False?
A. True
Correct B. False
C. Depends on the company's constitution
D. Not applicable

Correct Answer: B

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Question 18
A sole trader's business is considered a partnership if it has two or more owners. True or False?
A. True
Correct B. False
C. Depends on the jurisdiction
D. Not applicable

Correct Answer: B

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Question 19
A company's memorandum of association can be amended by a simple majority vote of shareholders. True or False?
A. True
Correct B. False
C. Depends on the company's constitution
D. Not applicable

Correct Answer: B

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Question 20
A sole trader's business is considered a limited company if it has a separate legal entity from its owner. True or False?
A. True
Correct B. False
C. Depends on the jurisdiction
D. Not applicable

Correct Answer: B

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Question 21
A company's articles of association can be amended by a two-thirds majority vote of shareholders. True or False?
A. True
Correct B. False
C. Depends on the company's constitution
D. Not applicable

Correct Answer: B

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Question 22
A sole trader's business is considered a limited liability partnership if it has two or more owners. True or False?
A. True
Correct B. False
C. Depends on the jurisdiction
D. Not applicable

Correct Answer: B

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Question 23
A company's memorandum of association can be amended by a simple majority vote of shareholders. True or False?
A. True
Correct B. False
C. Depends on the company's constitution
D. Not applicable

Correct Answer: B

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Question 24
A sole trader's business is considered a partnership if it has one owner. True or False?
A. True
Correct B. False
C. Depends on the jurisdiction
D. Not applicable

Correct Answer: B

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Question 25
A company's articles of association can be amended by a two-thirds majority vote of shareholders. True or False?
A. True
Correct B. False
C. Depends on the company's constitution
D. Not applicable

Correct Answer: B

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