POST UTME BABCOCK UNIVERSITY 2025 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A business has a profit of ₦500,000 and a turnover of ₦5,000,000. What is the gross profit margin?
A. 10%
B. 15%
C. 20%
D. 25%
Question 2
A sole trader's business is considered a separate legal entity from its owner. However, in the event of a lawsuit, the owner's personal assets may be at risk. Which of the following best describes the legal status of a sole trader?
A. A sole trader is considered a separate legal entity from its owner.
B. A sole trader's business is not considered a separate legal entity from its owner.
C. A sole trader's personal assets are not at risk in the event of a lawsuit.
D. A sole trader's business is considered a partnership.
Question 3
A company is considering the introduction of a new product line. The product has a fixed cost of ₦500,000 and a variable cost of ₦200 per unit. The selling price of the product is ₦300 per unit. If the company expects to sell 10,000 units of the product, what is the minimum price at which the company must sell the product to break even?
A. ₦250
B. ₦275
C. ₦300
D. ₦325
Question 4
A firm's cost function is given by C = 2L + 3K, where C is cost, L is labor, and K is capital. If the firm hires 5 units of labor and 10 units of capital, what is its total cost?
A. 50
B. 60
C. 70
D. 80
Question 5
A firm imports goods from a foreign country. The cost of importing the goods is 10,000. The firm sells the goods at a price that includes a 20% markup over the cost price. If the firm sells 100 units of the goods, what is the total revenue generated from the sale of the goods?
A. 12,000
B. 14,000
C. 16,000
D. 18,000
Question 6
A consumer purchases a product for ₦5,000 and pays a deposit of ₦1,000. If the product is returned within 30 days, the consumer is entitled to a full refund. However, if the product is returned after 30 days, the consumer is entitled to a refund of 50% of the purchase price. What is the maximum amount the consumer can claim as a refund if the product is returned after 30 days?
A. ₦2,000
B. ₦2,500
C. ₦3,000
D. ₦3,500
Question 7
A sole trader's business is not registered with the Corporate Affairs Commission (CAC). What is the implication of this on the business?
A. The business is not liable for any debts or obligations.
B. The business is not entitled to any tax reliefs.
C. The business is not required to file annual returns.
D. The business is not entitled to any government contracts.
Question 8
A sole trader has a business that generates an annual profit of ₦500,000. The sole trader's capital is ₦200,000, and the business has a turnover of ₦1,500,000. What is the sole trader's return on investment?
A. 25%
B. 30%
C. 35%
D. 40%
Question 9
A company specializes in producing high-quality leather goods. It has two production lines: one for handbags and the other for shoes. The handbag production line has a capacity of 500 units per day, while the shoe production line has a capacity of 300 units per day. If the company operates for 5 days a week and 52 weeks a year, what is the total number of units produced by the company in a year?
A. 150,000
B. 200,000
C. 250,000
D. 300,000
Question 10
A consumer is considering purchasing a product that has a price of ₦500 and a quality rating of 8/10. However, the consumer has a budget constraint of ₦300. What is the opportunity cost of purchasing this product?
A. ₦200
B. ₦300
C. ₦400
D. ₦500
Question 11
A firm is considering two different marketing strategies for its product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. If the firm wants to maximize its profits, which strategy is more effective?
A. Strategy A
B. Strategy B
C. Both strategies are equally effective
D. Neither strategy is effective
Question 12
A consumer has a budget constraint of 100 and a demand function for a good given by Q = 2 - 0.5P, where Q is quantity demanded and P is price. If the consumer's income is 100 and the price of the good is 20, what is the consumer's optimal quantity demanded?
A. 2
B. 3
C. 4
D. 5
Question 13
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 14
A company's articles of association may contain provisions that restrict the transfer of shares. Which of the following is a valid reason for restricting the transfer of shares?
A. To prevent the company from being taken over by a rival company.
B. To prevent the company from being sold to a foreign investor.
C. To prevent the company from being sold to an individual who does not meet the company's criteria.
D. To prevent the company from being sold to an individual who does not have the necessary qualifications.
Question 15
A company is considering two different production processes for its product. Process A requires an initial investment of ₦100,000 and has a variable cost of ₦50 per unit produced. Process B requires an initial investment of ₦150,000 and has a variable cost of ₦30 per unit produced. If the company wants to produce 1,000 units of the product, which process is more profitable?
A. Process A
B. Process B
C. Both processes are equally profitable
D. Neither process is profitable

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