POST UTME AFE BABALOLA UNIVERSITY 2022 Commerce | Objective

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Question 1
A company's inventory management system uses a first-in-first-out (FIFO) method. If the system has 120 units of a product with a cost of ₦150 per unit, and 30 units are sold, what is the total cost of the units sold?
Correct A. ₦4,500
B. ₦4,200
C. ₦4,800
D. ₦5,000

Correct Answer: A

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Question 2
A marketing firm is considering two advertising strategies: Strategy A, which costs ₦1.2 million and is expected to generate ₦4.8 million in revenue, and Strategy B, which costs ₦1.5 million and is expected to generate ₦6 million in revenue. What is the net present value (NPV) of Strategy A, assuming a discount rate of 10%?
Correct A. ₦2,400
B. ₦2,500
C. ₦2,600
D. ₦2,700

Correct Answer: A

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Question 3
A bank offers a 5-year fixed deposit account with an interest rate of 12% per annum compounded annually. If a customer deposits ₦100,000 at the beginning of the first year, what is the future value of the investment at the end of the fifth year?
Correct A. ₦163,922
B. ₦164,000
C. ₦164,100
D. ₦164,200

Correct Answer: A

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Question 4
A company's insurance policy has a deductible of ₦50,000 and a maximum payout of ₦200,000. If the company incurs a loss of ₦300,000, what is the amount the insurance company will pay?
Correct A. ₦150,000
B. ₦160,000
C. ₦170,000
D. ₦180,000

Correct Answer: A

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Question 5
A consumer protection agency receives a complaint from a customer who claims that a company misrepresented the features of a product. The agency investigates and finds that the company did indeed misrepresent the product. What is the agency's next step?
A. Issue a warning to the company
B. Impose a fine on the company
C. Order the company to recall the product
Correct D. Sue the company for damages

Correct Answer: D

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Question 6
A company is considering two different marketing strategies for its new product. Strategy A involves a high initial investment in advertising, but the product is expected to have a long shelf life and high demand. Strategy B involves a lower initial investment in advertising, but the product is expected to have a shorter shelf life and lower demand. Which strategy is more likely to result in higher profits?
Correct A. Strategy A
B. Strategy B
C. Both strategies are equally likely to result in higher profits
D. Neither strategy is likely to result in higher profits

Correct Answer: A

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Question 7
A consumer purchases a product with a price of ₦500 and a 10% discount. If the consumer pays ₦450, what is the amount of the discount?
Correct A. ₦50
B. ₦45
C. ₦40
D. ₦35

Correct Answer: A

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Question 8
A company produces two products, X and Y. Product X requires 2 hours of labor and 3 units of raw material to produce 1 unit, while product Y requires 3 hours of labor and 2 units of raw material to produce 1 unit. If the company has 120 hours of labor and 180 units of raw material available, how many units of product X and product Y should the company produce to maximize profits?
A. (10 units of X, 20 units of Y)
Correct B. (20 units of X, 10 units of Y)
C. (15 units of X, 25 units of Y)
D. (25 units of X, 15 units of Y)

Correct Answer: B

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Question 9
A company has a warehouse with a capacity of 1000 units. The company receives a shipment of 500 units of product A and 300 units of product B. If the company wants to store the products in a way that maximizes the use of space, what is the maximum number of units that can be stored?
A. 500
B. 600
C. 700
Correct D. 800

Correct Answer: D

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Question 10
A company exports 1000 units of product X to country A and 500 units of product Y to country B. If the company receives a payment of ₦500 per unit for product X and ₦300 per unit for product Y, what is the total amount of payment received?
A. ₦500,000
B. ₦550,000
C. ₦600,000
Correct D. ₦650,000

Correct Answer: D

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Question 11
A sole trader's business is registered under which of the following?
A. Partnership
Correct B. Sole Trader
C. Limited Liability Company
D. Cooperative Society

Correct Answer: B

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Question 12
What is the primary purpose of the Consumer Protection Act?
A. To regulate business practices
Correct B. To protect consumers from unfair trade practices
C. To promote competition among businesses
D. To regulate consumer behavior

Correct Answer: B

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Question 13
A company has a turnover of ₦1,000,000 and a profit of ₦200,000. What is its profit margin?
A. 20%
Correct B. 25%
C. 30%
D. 35%

Correct Answer: B

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Question 14
A business uses the following production function: Q = 2L + 3K. If L = 4 and K = 5, what is the total output?
A. 20
B. 25
Correct C. 30
D. 35

Correct Answer: C

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Question 15
A company has a market share of 30% in the industry. If the industry's total sales are ₦1,000,000, what is the company's sales revenue?
Correct A. ₦300,000
B. ₦400,000
C. ₦500,000
D. ₦600,000

Correct Answer: A

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Question 16
In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the equilibrium price and quantity of the product?
A. ₦100, 100 units
Correct B. ₦120, 80 units
C. ₦150, 60 units
D. ₦180, 40 units

Correct Answer: B

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Question 17
A company's production function is given by Q = 2L^0.5K^0.5. If the company wants to produce 400 units of output, and the wage rate is ₦10 per hour, and the rental rate is ₦5 per unit of capital, what is the minimum cost of production?
A. ₦2000
B. ₦2500
Correct C. ₦3000
D. ₦3500

Correct Answer: C

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Question 18
A firm is considering two different production technologies: one that requires 10 units of labor and 5 units of capital to produce 100 units of output, and another that requires 5 units of labor and 10 units of capital to produce 100 units of output. Which technology is more efficient?
Correct A. Technology 1
B. Technology 2
C. Both technologies are equally efficient
D. Neither technology is efficient

Correct Answer: A

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Question 19
A country's trade balance is given by the equation TB = X - M, where X is the value of exports and M is the value of imports. If the value of exports is ₦100 billion and the value of imports is ₦120 billion, what is the trade balance?
A. ₦20 billion surplus
Correct B. ₦20 billion deficit
C. ₦40 billion surplus
D. ₦40 billion deficit

Correct Answer: B

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Question 20
A firm's cost function is given by C = 2L + 3K, where L is the number of units of labor and K is the number of units of capital. If the firm hires 5 units of labor and 10 units of capital, what is the total cost of production?
A. ₦35
B. ₦50
Correct C. ₦65
D. ₦80

Correct Answer: C

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Question 21
In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the effect of an increase in the price of a complementary good on the demand for a good?
A. The demand for the good increases.
Correct B. The demand for the good decreases.
C. The demand for the good remains unchanged.
D. The demand for the good increases, but at a decreasing rate.

Correct Answer: B

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Question 22
A company is considering two different production processes for a new product. Process A has a higher fixed cost but a lower variable cost, while Process B has a lower fixed cost but a higher variable cost. Which process should the company choose if it expects to produce 10,000 units?
Correct A. Process A
B. Process B
C. Either process is equally profitable
D. Neither process is profitable

Correct Answer: A

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Question 23
A firm is considering exporting its product to a foreign market. The firm's current price is 100, and the foreign market's price is 120. However, the firm must pay a 10% tariff on the product. What is the firm's effective price in the foreign market?
A. 108
Correct B. 110
C. 112
D. 120

Correct Answer: B

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Question 24
A company is considering investing in a new project. The project has a required rate of return of 12% and an expected return of 15%. What is the company's expected return in excess of the required rate of return?
A. 3%
Correct B. 5%
C. 7%
D. 9%

Correct Answer: B

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Question 25
A firm is considering investing in a new project. The project has a required rate of return of 10% and an expected return of 12%. What is the company's expected return in excess of the required rate of return?
A. 2%
Correct B. 4%
C. 6%
D. 8%

Correct Answer: B

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