Practice post utme lautech commerce 2020 Past Questions

Question 1

A sole trader's business is not registered under the Companies and Allied Matters Act (CAMA) 2020. What is the primary advantage of this business structure?

A. Limited liability

B. Unlimited liability

C. Separation of ownership and management

Correct D. Flexibility in decision-making

Correct Answer: D

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Question 2

A company's memorandum of association is a document that outlines the company's

A. Objects and powers

B. Share capital and shareholding

C. Directors and their powers

Correct D. All of the above

Correct Answer: D

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Question 3

A producer's production function is given by the equation Q = 2L^(1/2)K^(1/2). If the producer wants to increase output by 20% while keeping labor constant, what should be the percentage increase in capital?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 4

A company's warehouse is stocked with 500 units of a product. The company uses the first-in-first-out (FIFO) method of inventory management. If 200 units are sold, what is the new quantity of the product in the warehouse?

Correct A. 300

B. 400

C. 500

D. 600

Correct Answer: A

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Question 5

A company uses the following transportation costs: 100 for the first 100 units, 80 for the next 200 units, and 60 for the next 300 units. If the company sells 600 units, what is the total transportation cost?

A. 12,000

B. 13,000

Correct C. 14,000

D. 15,000

Correct Answer: C

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Question 6

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 its debts.

Correct B. The business is not entitled to limited liability.

C. The business is not required to file annual returns.

D. The business is not entitled to issue share certificates.

Correct Answer: B

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Question 7

A company has a share capital of ₦1,000,000, divided into 100,000 ordinary shares of ₦10 each. If the company issues 50,000 shares to the public at a premium of ₦5 per share, what is the total amount received from the public?

A. ₦250,000

B. ₦500,000

Correct C. ₦750,000

D. ₦1,000,000

Correct Answer: C

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Question 8

A foreign company wishes to export goods to Nigeria. What is the first step the company should take?

Correct A. Obtain a Certificate of Origin from the Nigerian Chamber of Commerce.

B. Register with the Nigerian Customs Service.

C. Obtain an Import License from the Nigerian Export Promotion Council.

D. Obtain a Certificate of Incorporation from the Corporate Affairs Commission.

Correct Answer: A

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Question 9

A country has a comparative advantage in producing wheat, but a disadvantage in producing rice. What is the opportunity cost of producing wheat?

Correct A. The opportunity cost of producing wheat is the amount of rice that could be produced instead.

B. The opportunity cost of producing wheat is the amount of wheat that could be produced instead.

C. The opportunity cost of producing wheat is the amount of wheat that could be produced in another country.

D. The opportunity cost of producing wheat is the amount of rice that could be produced in another country.

Correct Answer: A

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Question 10

A company uses the following transportation costs: ₦100 per unit for transportation by road, ₦150 per unit for transportation by rail, and ₦200 per unit for transportation by air. If the company has to transport 100 units of goods, what is the total transportation cost?

A. ₦15,000

B. ₦20,000

Correct C. ₦25,000

D. ₦30,000

Correct Answer: C

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Question 11

A firm specializes in producing a single product, which is a type of commodity. The firm's production function is given by Q = 100L^0.5, where Q is the quantity produced and L is the labor input. If the firm's labor input increases by 25%, what is the percentage change in the quantity produced?

A. 6.25%

Correct B. 12.5%

C. 25%

D. 50%

Correct Answer: B

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Question 12

A company is considering two different marketing strategies: Strategy A and Strategy B. Strategy A involves a one-time payment of ₦100,000, while Strategy B involves a monthly payment of ₦10,000 for 12 months. Which strategy is more cost-effective?

A. Strategy A

Correct B. Strategy B

C. Both strategies are equally cost-effective

D. Neither strategy is cost-effective

Correct Answer: B

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Question 13

A firm is considering investing in a new project. The project has a net present value (NPV) of ₦500,000 and a payback period of 5 years. What is the internal rate of return (IRR) of the project?

A. 10%

B. 15%

Correct C. 20%

D. 25%

Correct Answer: C

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Question 14

A company is considering exporting its product to a foreign market. The company's export price is ₦200 per unit, and the foreign market price is ₦250 per unit. What is the company's export profit per unit?

A. ₦50 per unit

Correct B. ₦75 per unit

C. ₦100 per unit

D. ₦125 per unit

Correct Answer: B

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Question 15

A firm is considering investing in a new project. The project has a cost of ₦1,000,000 and a benefit of ₦1,200,000. What is the net present value (NPV) of the project?

Correct A. ₦200,000

B. ₦300,000

C. ₦400,000

D. ₦500,000

Correct Answer: A

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Question 16

A company specializes in producing a single product, which is a type of electronic component. The production process involves several stages, including design, prototyping, testing, and manufacturing. The company uses a just-in-time (JIT) inventory system to manage its inventory levels. What is the primary advantage of using a JIT inventory system in this scenario?

A. Reduced inventory costs

B. Improved product quality

Correct C. Increased production efficiency

D. Enhanced customer satisfaction

Correct Answer: C

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Question 17

A consumer purchases a product from a retailer, but upon using it, discovers that it is defective. The consumer contacts the retailer, who offers a replacement or a refund. However, the consumer is not satisfied with the retailer's response and decides to take the matter to a consumer protection agency. What is the primary role of a consumer protection agency in this scenario?

A. To provide legal advice to consumers

B. To mediate disputes between consumers and retailers

Correct C. To investigate complaints and enforce consumer rights

D. To promote consumer awareness and education

Correct Answer: C

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Question 18

A company purchases insurance coverage for its business operations, including liability insurance and property insurance. The insurance policy has a deductible of ₦10,000 and a policy limit of ₦500,000. If the company incurs a loss of ₦200,000, what is the amount that the insurance company will pay?

Correct A. ₦190,000

B. ₦200,000

C. ₦210,000

D. ₦220,000

Correct Answer: A

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Question 19

A company produces a product that is subject to a patent. The patent holder grants a license to the company to manufacture and sell the product. However, the company fails to pay the required royalties to the patent holder. What is the primary consequence of the company's actions?

A. The patent holder can revoke the license

Correct B. The company can be sued for patent infringement

C. The company must pay a fine to the patent holder

D. The patent holder can terminate the license

Correct Answer: B

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Question 20

A company uses a warehouse management system to track its inventory levels. The system uses a barcode scanning process to record the movement of goods in and out of the warehouse. What is the primary advantage of using a barcode scanning process in this scenario?

Correct A. Improved inventory accuracy

B. Reduced labor costs

C. Increased productivity

D. Enhanced customer satisfaction

Correct Answer: A

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Question 21

A company's marketing strategy involves a mix of advertising and personal selling. Which of the following best describes the primary goal of this strategy?

A. To increase brand awareness

B. To generate leads

C. To build customer relationships

Correct D. To increase sales revenue

Correct Answer: D

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Question 22

A sole trader's business is affected by the following factors: market demand, competition, government policies, and technological advancements. Which of the following best describes the impact of these factors on the business?

A. The factors have a neutral impact on the business

B. The factors have a positive impact on the business

C. The factors have a negative impact on the business

Correct D. The factors have a mixed impact on the business

Correct Answer: D

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Question 23

A company's financial statements show a decrease in revenue and an increase in expenses. Which of the following best describes the impact of these changes on the company's profitability?

A. The company's profitability has increased

Correct B. The company's profitability has decreased

C. The company's profitability has remained the same

D. The company's profitability has improved

Correct Answer: B

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Question 24

A bank's interest rate on a loan is 12% per annum. If the loan amount is ₦100,000, how much interest will be paid after 2 years?

A. ₦24,000

B. ₦24,500

Correct C. ₦25,000

D. ₦25,500

Correct Answer: C

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Question 25

A company's marketing mix involves a product with a unique feature, a price that is slightly higher than the competition, a place that is easily accessible, and a promotion that is targeted at a specific audience. Which of the following best describes the primary goal of this marketing mix?

A. To increase brand awareness

B. To generate leads

C. To build customer relationships

Correct D. To increase sales revenue

Correct Answer: D

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