POST UTME ELIZADE UNIVERSITY 2020 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A company is considering two different production processes for a new product. Process A requires an initial investment of ₦10 million and produces 100 units per month, while Process B requires an initial investment of ₦5 million and produces 50 units per month. If the company expects to sell each unit for ₦20,000, which process should it choose?
A. Process A, because it produces more units per month.
B. Process B, because it requires a lower initial investment.
C. Process A, because it has a higher profit margin.
D. Process B, because it has a lower opportunity cost.
Question 2
A life insurance policy has a premium of ₦10,000 per annum. If the policyholder pays the premium for 5 years, what is the total amount paid?
A. ₦50,000
B. ₦60,000
C. ₦70,000
D. ₦80,000
Question 3
A firm is considering two different production processes for a new product. Process A has a fixed cost of ₦10,000 and a variable cost of ₦50 per unit. Process B has a fixed cost of ₦20,000 and a variable cost of ₦30 per unit. If the selling price of the product is ₦100 per unit, and the firm expects to sell 1,000 units, which process should the firm choose?
A. Process A
B. Process B
C. Both processes are equally profitable
D. Neither process is profitable
Question 4
A country is considering imposing tariffs on imported goods to protect its domestic industry. Which of the following is a potential consequence of this policy?
A. Increased competition in the domestic market.
B. Reduced prices for consumers.
C. Increased unemployment in the domestic industry.
D. All of the above.
Question 5
A warehouse in Nigeria stores goods worth ₦10 million. The warehouse is insured against theft and damage. The insurance premium is ₦200,000 per annum. What is the insurance premium as a percentage of the total value of the goods?
A. 2%
B. 1%
C. 0.5%
D. 0.2%
Question 6
A firm's inventory system uses the Economic Order Quantity (EOQ) model. If the firm's demand rate is 100 units per month, the ordering cost is ₦100 per order, and the holding cost is ₦5 per unit per month, what is the optimal order quantity?
A. 100
B. 200
C. 500
D. 1000
Question 7
A sole trader in Nigeria has a business income of ₦500,000 and a business expense of ₦200,000. What is the sole trader's profit?
A. ₦300,000
B. ₦400,000
C. ₦500,000
D. ₦600,000
Question 8
A firm's break-even point is calculated using the formula: break-even point = fixed costs / (price per unit - variable costs per unit). If a firm has fixed costs of ₦100,000, variable costs of ₦20 per unit, and a selling price of ₦50 per unit, what is its break-even point?
A. 1000 units
B. 2000 units
C. 5000 units
D. 10,000 units
Question 9
A firm is considering investing in a new project. The project has a required rate of return of 15% and an expected return of 18%. The firm's cost of capital is 12%. What is the project's sensitivity to the required rate of return?
A. Highly sensitive
B. Moderately sensitive
C. Not sensitive
D. Very insensitive
Question 10
A consumer protection agency has received a complaint about a company that is selling a product with a misleading label. The label claims that the product is '100% natural' when in fact it contains 20% artificial ingredients. Which of the following is a correct statement about the agency's response?
A. The agency should fine the company and order it to change the label.
B. The agency should investigate the company's manufacturing process to determine the extent of the deception.
C. The agency should inform the public about the misleading label and allow the company to correct it.
D. The agency should take no action, as the company is not violating any laws.
Question 11
A company is considering exporting its product to a foreign market. What is the primary advantage of exporting?
A. Increased market share
B. Reduced competition
C. Access to new markets and customers
D. Lower production costs
Question 12
A company is considering exporting a product to a foreign market. The product has a domestic price of ₦100 per unit and a foreign price of ₦120 per unit. The transportation cost is ₦20 per unit, and the exchange rate is 1 USD = ₦200. If the company expects to sell 1,000 units, what is the profit per unit in USD?
A. 0.20
B. 0.30
C. 0.40
D. 0.50
Question 13
A firm's production function is given by Q = 100L^0.5K^0.5, where Q is output, L is labor, and K is capital. If the firm wants to increase its output by 20% while keeping capital constant at 100 units, how much labor (L) is required?
A. 500
B. 1000
C. 2000
D. 5000
Question 14
Determine the optimal inventory level for a firm that produces and sells a single product, given the following data: Demand rate = 100 units/day, Lead time = 5 days, Production rate = 200 units/day, Holding cost per unit = ₦50, Ordering cost per order = ₦500, and Carrying cost per unit per day = ₦10.
A. 100 units
B. 200 units
C. 300 units
D. 400 units
Question 15
A company has a fleet of 10 buses, each with a capacity of 50 passengers. If the company operates 5 routes, what is the total number of passengers that can be carried per day?
A. 2,500
B. 5,000
C. 7,500
D. 10,000

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Help others prepare! Share this practice hub: