POST UTME BELLS UNIVERSITY 2018 Commerce | Objective

Are you preparing for POST UTME BELLS UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2018 Commerce (Objective) questions designed to simulate the real exam environment.

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

Correct Answer: C

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Question 2
A company has a capital structure consisting of 60% debt and 40% equity. If the company's cost of debt is 8% and its cost of equity is 12%, what is the company's weighted average cost of capital (WACC)?
A. 6.4
Correct B. 7.2
C. 8
D. 9.6

Correct Answer: B

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Question 3
A marketing manager is considering two different advertising campaigns. Campaign A has a cost of ₦1,000,000 and is expected to generate ₦2,500,000 in revenue. Campaign B has a cost of ₦500,000 and is expected to generate ₦1,200,000 in revenue. Which campaign has a higher return on investment (ROI)?
A. 1.25
Correct B. 1.6
C. 2
D. 2.5

Correct Answer: B

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Question 4
A life insurance policy has a premium of ₦50,000 per year and a death benefit of ₦1,000,000. If the policyholder dies after 5 years, what is the total amount paid to the beneficiary?
A. ₦250000
B. ₦500000
C. ₦750000
Correct D. ₦1000000

Correct Answer: D

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Question 5
A bank has a reserve requirement of 10% and a cash reserve of ₦1,000,000. If the bank's deposits are ₦10,000,000, what is the bank's required reserve ratio?
A. 0.05
Correct B. 0.1
C. 0.15
D. 0.2

Correct Answer: B

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Question 6
In a perfectly competitive market, the supply curve is horizontal and the demand curve is downward-sloping. What is the equilibrium price and quantity in this market?
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 7
A company's production function is given by Q = 2L^0.5K^0.5. If the company wants to produce 16 units of output, and the wage rate is ₦100 per unit of labor, and the rental rate is ₦200 per unit of capital, what is the optimal level of labor and capital?
A. L = 4, K = 4
Correct B. L = 8, K = 2
C. L = 16, K = 1
D. L = 32, K = 0.5

Correct Answer: B

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Question 8
A firm's cost function is given by C(Q) = 2Q^2 + 10Q + 100. If the firm produces 10 units of output, what is the total cost?
A. ₦1200
B. ₦1500
Correct C. ₦1800
D. ₦2000

Correct Answer: C

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Question 9
A bank's balance sheet is given by Assets = ₦100,000, Liabilities = ₦50,000, and Equity = ₦50,000. What is the bank's liquidity ratio?
A. 1:1
Correct B. 2:1
C. 3:1
D. 4:1

Correct Answer: B

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Question 10
A company's cash flow statement is given by Cash Flow from Operations = ₦100,000, Cash Flow from Investing = ₦50,000, and Cash Flow from Financing = ₦20,000. What is the company's net change in cash?
A. ₦70,000
B. ₦80,000
C. ₦90,000
Correct D. ₦100,000

Correct Answer: D

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Question 11
A bank's return on assets (ROA) is a measure of its ability to generate earnings from its assets. If a bank has an ROA of 0.12 and its total assets are ₦120 billion, what is its net income?
Correct A. ₦14.4 billion
B. ₦14.2 billion
C. ₦14.6 billion
D. ₦14.8 billion

Correct Answer: A

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Question 12
A firm produces two goods, X and Y, using two inputs, labor and capital. The production function for good X is given by QX = 2L^0.5K^0.5, where QX is the quantity of good X produced, L is the amount of labor used, and K is the amount of capital used. If the firm uses 100 units of labor and 200 units of capital, how much of good X will it produce?
A. 100
B. 200
Correct C. 300
D. 400

Correct Answer: C

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Question 13
A company has a portfolio of stocks with a beta of 1.2. If the market return is 8% and the risk-free rate is 4%, what is the expected return on the portfolio?
A. 10%
B. 11%
Correct C. 12%
D. 13%

Correct Answer: C

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Question 14
A firm is considering two marketing strategies: a low-cost strategy with a 20% market share and a high-cost strategy with a 30% market share. If the firm's revenue is ₦100 million and its cost is ₦20 million, what is the profit under each strategy?
A. ₦60 million
Correct B. ₦80 million
C. ₦100 million
D. ₦120 million

Correct Answer: B

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Question 15
A company's supply function is given by Q = 100 + 2P, where Q is the quantity supplied and P is the price. If the price is ₦50, how much will the company supply?
A. 150
B. 200
Correct C. 250
D. 300

Correct Answer: C

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Question 16
A company's sole trader has a warehouse with a capacity of 10,000 units. If the company's average daily sales are 200 units, and the stock level is currently at 50% capacity, what is the number of days the company can maintain its current sales rate without replenishing its stock?
A. 20 days
Correct B. 30 days
C. 40 days
D. 50 days

Correct Answer: B

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Question 17
A sole trader has a business that sells goods worth ₦500,000. If the trader's profit margin is 25% and the business has a tax rate of 10%, what is the trader's net profit?
A. ₦62,500
B. ₦65,000
Correct C. ₦67,500
D. ₦70,000

Correct Answer: C

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Question 18
A company has a warehouse with a capacity of 5,000 units. If the company's average daily sales are 150 units, and the stock level is currently at 75% capacity, what is the number of days the company can maintain its current sales rate without replenishing its stock?
A. 15 days
B. 20 days
Correct C. 25 days
D. 30 days

Correct Answer: C

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Question 19
A company's sole trader has a warehouse with a capacity of 8,000 units. If the company's average daily sales are 250 units, and the stock level is currently at 50% capacity, what is the number of days the company can maintain its current sales rate without replenishing its stock?
A. 25 days
Correct B. 30 days
C. 35 days
D. 40 days

Correct Answer: B

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Question 20
A sole trader has a business that sells goods worth ₦750,000. If the trader's profit margin is 20% and the business has a tax rate of 15%, what is the trader's net profit?
A. ₦90,000
B. ₦92,500
Correct C. ₦95,000
D. ₦97,500

Correct Answer: C

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Question 21
A sole trader's business is registered under which of the following?
A. Partnership
B. Limited Liability Company
Correct C. Sole Proprietorship
D. Cooperative Society

Correct Answer: C

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Question 22
A company's articles of association may be amended by a
A. Simple Majority
B. Two-Thirds Majority
C. Special Resolution
Correct D. Ordinary Resolution

Correct Answer: D

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Question 23
A warehouse's inventory management system uses the
Correct A. First-In-First-Out (FIFO) Method
B. Last-In-First-Out (LIFO) Method
C. Weighted Average Cost (WAC) Method
D. Moving Average Cost (MAC) Method

Correct Answer: A

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Question 24
A marketing strategy that focuses on creating a unique selling proposition (USP) is known as
A. Product Differentiation
B. Market Segmentation
C. Target Marketing
Correct D. Positioning

Correct Answer: D

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Question 25
A company's financial statements may be audited by a
A. Certified Public Accountant (CPA)
B. Chartered Accountant (CA)
C. Chartered Institute of Bankers (CIB)
Correct D. Institute of Chartered Accountants of Nigeria (ICAN)

Correct Answer: D

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