POST UTME IMS U 2023 Commerce | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A company is considering two investment options: Option A, which has a 5% annual return, and Option B, which has a 7% annual return. If the company invests ₦100,000 in each option, how much more money will it have after 5 years if it chooses Option B?
A. ₦122,976
B. ₦130,000
C. ₦132,976
D. ₦140,000
Question 2
A firm is considering two different insurance policies to protect its assets. Policy A has a premium of ₦10,000 per year, while Policy B has a premium of ₦5,000 per year. However, Policy B has a deductible of ₦20,000. If the firm expects to incur a loss of ₦30,000, what is the total cost of Policy B?
A. ₦25,000
B. ₦30,000
C. ₦35,000
D. ₦40,000
Question 3
A company's financial statements are prepared using the accrual accounting method. Which of the following is a characteristic of accrual accounting?
A. Matching principle
B. Materiality principle
C. Consistency principle
D. Going concern principle
Question 4
A firm is considering two different marketing strategies for its new product. Strategy A involves a high level of advertising and promotion, while Strategy B involves a low level of advertising and promotion. Which strategy is more likely to result in a higher level of sales?
A. Strategy A, as it will create more awareness and interest in the product
B. Strategy B, as it will be more cost-effective and allow the firm to focus on other areas
C. Strategy A, as it will allow the firm to target a wider audience
D. Strategy B, as it will allow the firm to build a loyal customer base
Question 5
A warehouse is storing goods worth ₦10 million. Which of the following methods would be most effective in controlling inventory levels?
A. First-In-First-Out (FIFO)
B. Last-In-First-Out (LIFO)
C. Weighted Average Cost (WAC)
D. Just-In-Time (JIT)
Question 6
A company specializes in producing and selling a unique brand of chocolates. The production process involves several stages, including sourcing of raw materials, manufacturing, packaging, and distribution. Which of the following is an example of a cost that would be classified as a fixed cost in the production process?
A. Rent paid for the factory
B. Cost of raw materials used in production
C. Salaries paid to production staff
D. Cost of packaging materials
Question 7
A company is considering the implementation of a new marketing strategy. The strategy involves creating a social media campaign that will target a specific demographic. What is the primary goal of this campaign, assuming the company is looking to increase sales?
A. To increase brand awareness
B. To generate leads
C. To drive website traffic
D. To increase sales
Question 8
A sole trader is considering the purchase of a new business. The business will require an initial investment of ₦2,000,000 and is expected to generate a profit of ₦500,000 per year for 5 years. What is the internal rate of return (IRR) of the investment, assuming a discount rate of 12%?
A. 12%
B. 15%
C. 18%
D. 20%
Question 9
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 3 units of capital, what is the cost?
A. 15
B. 20
C. 25
D. 30
Question 10
A company's warehouse is designed to store goods worth ₦5 million. The warehouse has a capacity to store goods worth ₦10 million. What is the ratio of the capacity to the value of goods stored?
A. 1:2
B. 1:5
C. 2:5
D. 5:10
Question 11
A company is considering entering into a contract with a supplier. The company wants to ensure that the contract is enforceable. Which of the following is a key requirement for a contract to be enforceable?
A. The contract must be in writing
B. The contract must be signed by both parties
C. The contract must be for a legitimate business purpose
D. All of the above
Question 12
A company is considering two different transportation modes to move its products from the factory to the warehouse. Mode A involves using a truck, while Mode B involves using a train. If the company expects to move 500 units per day, and the cost of using a truck is ₦150 per unit, while the cost of using a train is ₦120 per unit, what is the total cost of using Mode A for 30 days?
A. ₦22,500
B. ₦30,000
C. ₦37,500
D. ₦45,000
Question 13
A company's financial statements are audited annually. The auditor's report is presented to the shareholders at the annual general meeting. Which of the following is a primary benefit of auditing?
A. Enhanced credibility of financial statements
B. Improved internal control systems
C. Increased transparency in financial reporting
D. Reduced risk of financial misstatement
Question 14
A company is considering setting up a new warehouse to store its products. The company has identified several potential locations for the warehouse. Which of the following is an important factor that the company should consider when evaluating the potential locations?
A. Proximity to the company's manufacturing plant
B. Availability of transportation infrastructure
C. Accessibility to the company's target market
D. All of the above
Question 15
A company is considering the purchase of a new machine that will cost ₦5,000,000. The machine is expected to last for 5 years and will save the company ₦1,200,000 per year in labor costs. However, the machine will also require an annual maintenance cost of ₦300,000. What is the net present value (NPV) of the machine, assuming a discount rate of 10%?
A. ₦2,500,000
B. ₦3,500,000
C. ₦4,500,000
D. ₦5,500,000

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