POST UTME CHRISTOPHER UNIVERSITY 2020 Commerce | Objective

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Question 1
A company has two warehouses, A and B, with capacities of 1000 and 500 units respectively. Warehouse A has 800 units of stock, while Warehouse B has 200 units. If the company receives an order for 1200 units, which warehouse should it use to fulfill the order?
A. Warehouse A
B. Warehouse B
Correct C. Both warehouses
D. Neither warehouse

Correct Answer: C

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Question 2
A business has two types of insurance policies: A and B. Policy A has a premium of ₦1000 and a deductible of ₦500. Policy B has a premium of ₦800 and a deductible of ₦200. If the business incurs a loss of ₦1200, which policy should it choose?
A. Policy A
Correct B. Policy B
C. Both policies
D. Neither policy

Correct Answer: B

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Question 3
A company exports 500 units of goods to a foreign country. The cost of transportation is ₦200 per unit, and the company earns a profit of ₦300 per unit. If the exchange rate is 1 USD = 500 NGN, what is the total profit in USD?
A. ₦150,000
Correct B. ₦200,000
C. ₦250,000
D. ₦300,000

Correct Answer: B

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Question 4
A sole trader has a business that specializes in the production of textiles. The business has a fixed cost of ₦100,000 and a variable cost of ₦50 per unit. If the business produces 1000 units, what is the total cost?
A. ₦150,000
B. ₦200,000
Correct C. ₦250,000
D. ₦300,000

Correct Answer: C

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Question 5
A company has a production capacity of 500 units per day. If the company operates for 20 days, what is the total production?
A. 5000 units
B. 10000 units
C. 15000 units
Correct D. 20000 units

Correct Answer: D

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Question 6
In a sole trade business, what is the primary advantage of using a sole trader's personal assets as security for business loans?
Correct A. Increased creditworthiness
B. Reduced business risk
C. Improved cash flow management
D. Enhanced business reputation

Correct Answer: A

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Question 7
A company's articles of association state that a minimum of 50% of the shares must be held by the public. What type of company is this?
Correct A. Public Limited Company
B. Private Limited Company
C. Unlimited Company
D. Quoted Company

Correct Answer: A

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Question 8
A warehouse manager wants to store 500 boxes of goods in a warehouse with a capacity of 2000 boxes. What is the maximum utilization rate of the warehouse?
A. 25%
Correct B. 50%
C. 75%
D. 100%

Correct Answer: B

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Question 9
A company's insurance policy has a deductible of ₦100,000. If the company suffers a loss of ₦500,000, how much will the insurance company pay?
Correct A. ₦400,000
B. ₦500,000
C. ₦600,000
D. ₦700,000

Correct Answer: A

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Question 10
A transport company has a fleet of 50 vehicles, with an average speed of 60 km/h. If the company operates for 8 hours a day, what is the total distance traveled in a day?
A. 18,000 km
B. 20,000 km
Correct C. 22,000 km
D. 24,000 km

Correct Answer: C

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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 statement.
Correct A. It allows the business to enter into contracts independently.
B. It provides the owner with unlimited personal liability.
C. It enables the business to own assets separately from the owner.
D. It restricts the business from making decisions without the owner's consent.

Correct Answer: A

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Question 12
A company's memorandum of association outlines its objectives and powers. What are the consequences of a company exceeding its stated objectives?
Correct A. The company may be wound up by the court.
B. The company's directors may be held personally liable.
C. The company's shareholders may sue for damages.
D. The company's Memorandum of Association may be amended.

Correct Answer: A

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Question 13
A producer's production function is given by Q = 2L^0.5K^0.5. If the producer's labor and capital inputs are 4 and 9 respectively, calculate the output.
A. 6
Correct B. 8
C. 10
D. 12

Correct Answer: B

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Question 14
A firm's cost function is given by C = 2L + 3K. If the firm's labor and capital inputs are 2 and 4 respectively, calculate the total cost.
A. 10
Correct B. 12
C. 14
D. 16

Correct Answer: B

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Question 15
A firm's revenue function is given by R = 2Q^2. If the firm's output is 3, calculate the total revenue.
A. 18
Correct B. 20
C. 22
D. 24

Correct Answer: B

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Question 16
A company's sole trader is considering the purchase of a new warehouse. The warehouse costs ₦5 million and has a 5-year lifespan. The company expects to use the warehouse for 3 years and then sell it for ₦1.5 million. The company's cost of capital is 10% per annum. Calculate the present value of the warehouse using the net present value (NPV) method.
Correct A. ₦3,750,000
B. ₦4,250,000
C. ₦4,750,000
D. ₦5,250,000

Correct Answer: A

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Question 17
A company's marketing strategy involves a 20% increase in advertising expenditure. If the initial advertising expenditure is ₦1.2 million, what is the new advertising expenditure?
Correct A. ₦1,440,000
B. ₦1,440,000
C. ₦1,440,000
D. ₦1,440,000

Correct Answer: A

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Question 18
A company's sole trader is considering the purchase of a new warehouse. The warehouse costs ₦5 million and has a 5-year lifespan. The company expects to use the warehouse for 3 years and then sell it for ₦1.5 million. The company's cost of capital is 10% per annum. Calculate the present value of the warehouse using the net present value (NPV) method.
Correct A. ₦3,750,000
B. ₦4,250,000
C. ₦4,750,000
D. ₦5,250,000

Correct Answer: A

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Question 19
A company's marketing strategy involves a 20% increase in advertising expenditure. If the initial advertising expenditure is ₦1.2 million, what is the new advertising expenditure?
Correct A. ₦1,440,000
B. ₦1,440,000
C. ₦1,440,000
D. ₦1,440,000

Correct Answer: A

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Question 20
A company's sole trader is considering the purchase of a new warehouse. The warehouse costs ₦5 million and has a 5-year lifespan. The company expects to use the warehouse for 3 years and then sell it for ₦1.5 million. The company's cost of capital is 10% per annum. Calculate the present value of the warehouse using the net present value (NPV) method.
Correct A. ₦3,750,000
B. ₦4,250,000
C. ₦4,750,000
D. ₦5,250,000

Correct Answer: A

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Question 21
In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will
A. increase
Correct B. decrease
C. remain constant
D. move in the opposite direction

Correct Answer: B

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Question 22
A company's marketing strategy involves creating a unique selling proposition (USP) to differentiate its product from competitors. What is the primary goal of a USP?
A. To increase market share
B. To reduce production costs
Correct C. To create a unique selling proposition
D. To improve product quality

Correct Answer: C

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Question 23
A consumer protection agency has received a complaint about a company's unfair business practices. The agency has the power to
A. Fine the company
B. Order the company to cease operations
C. Investigate the company's practices
Correct D. All of the above

Correct Answer: D

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Question 24
A bank's primary function is to act as a
A. Central bank
Correct B. Commercial bank
C. Investment bank
D. Development bank

Correct Answer: B

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Question 25
A production process involves the transformation of inputs into outputs. What is the primary goal of a production process?
A. To increase market share
B. To reduce production costs
C. To create a unique selling proposition
Correct D. To produce goods and services

Correct Answer: D

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