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POST UTME MOUNTAIN TOP UNIVERSITY 2022 Commerce | Objective

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Question 1

In a foreign trade transaction, a Nigerian exporter sold goods worth ₦1,500,000 to a foreign buyer. The exporter was paid in US dollars, and the exchange rate at the time of payment was ₦420 per US dollar. If the exporter's bank charged a commission of 2% on the transaction, what was the exporter's net earnings in naira?

Correct A. ₦1,400,000

B. ₦1,500,000

C. ₦1,600,000

D. ₦1,700,000

Correct Answer: A

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Question 2

A consumer protection agency received a complaint from a customer who was charged an interest rate of 24% per annum on a loan of ₦200,000. If the loan was repaid in 2 years, what was the total interest paid by the customer?

Correct A. ₦48,000

B. ₦50,000

C. ₦52,000

D. ₦54,000

Correct Answer: A

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Question 3

A company's warehouse had a capacity to store 10,000 units of goods. If the warehouse was 75% full, and each unit of goods occupied a space of 0.5 cubic meters, what was the total volume of goods stored in the warehouse?

A. 2,500 cubic meters

B. 3,000 cubic meters

Correct C. 3,750 cubic meters

D. 4,000 cubic meters

Correct Answer: C

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Question 4

A bank's customer deposited ₦100,000 into a savings account that earned an interest rate of 6% per annum compounded annually. If the interest was compounded for 3 years, what was the total amount in the account after 3 years?

A. ₦110,000

Correct B. ₦112,000

C. ₦114,000

D. ₦116,000

Correct Answer: B

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Question 5

A company's financial statements showed a net profit of ₦500,000. If the company's tax rate was 25%, and the company's management decided to distribute 60% of the net profit as dividends, what was the amount of dividends paid to shareholders?

A. ₦200,000

Correct B. ₦250,000

C. ₦300,000

D. ₦350,000

Correct Answer: B

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Question 6

A company is considering launching a new product line. The marketing manager has estimated that the product will generate a profit of ₦500,000 in the first year, ₦600,000 in the second year, and ₦700,000 in the third year. If the company's cost of capital is 10% per annum, calculate the present value of the expected cash flows using the formula for present value of an annuity.

Correct A. ₦1,500,000

B. ₦1,600,000

C. ₦1,700,000

D. ₦1,800,000

Correct Answer: A

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Question 7

A consumer protection agency has received a complaint from a customer who was sold a defective product. The product was purchased for ₦20,000 and the customer is seeking a refund. If the product is deemed to be defective, the consumer protection agency will order the manufacturer to refund the full amount. However, if the product is deemed to be not defective, the customer will be required to pay a fee of ₦5,000 for the cost of testing. What is the expected value of the outcome for the customer?

A. ₦15,000

Correct B. ₦20,000

C. ₦25,000

D. ₦30,000

Correct Answer: B

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Question 8

A bank is considering offering a new type of loan to its customers. The loan will have a fixed interest rate of 12% per annum and will be repayable in equal installments over a period of 5 years. If the customer borrows ₦500,000, what will be the monthly installment?

A. ₦12,000

Correct B. ₦15,000

C. ₦18,000

D. ₦20,000

Correct Answer: B

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Question 9

A company has a portfolio of investments that generates a return of 8% per annum. If the company's cost of capital is 10% per annum, what is the expected return on equity?

A. 6%

Correct B. 8%

C. 10%

D. 12%

Correct Answer: B

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Question 10

A consumer protection agency has received a complaint from a customer who was sold a product that did not meet the required standards. The product was purchased for ₦50,000 and the customer is seeking a refund. If the product is deemed to be defective, the consumer protection agency will order the manufacturer to refund the full amount. However, if the product is deemed to be not defective, the customer will be required to pay a fee of ₦10,000 for the cost of testing. What is the expected value of the outcome for the customer?

A. ₦40,000

Correct B. ₦50,000

C. ₦60,000

D. ₦70,000

Correct Answer: B

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Question 11

A sole trader's business is registered under which of the following?

A. Partnership

B. Limited Liability Company

Correct C. Sole Trader

D. Cooperative Society

Correct Answer: C

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Question 12

A company's articles of association can 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 13

A consumer protection law that prohibits unfair contract terms is

A. Consumer Protection Act

Correct B. Unfair Contract Terms Act

C. Sale of Goods Act

D. Supply of Goods and Services Act

Correct Answer: B

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Question 14

A risk management strategy that involves transferring risk to another party is

A. Risk Retention

Correct B. Risk Transfer

C. Risk Avoidance

D. Risk Reduction

Correct Answer: B

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Question 15

A production process that involves breaking down a raw material into smaller components is

A. Manufacturing

B. Assembly

C. Disassembly

Correct D. Decomposition

Correct Answer: D

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Question 16

A company's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the company increases its labor input from 100 to 121 units and its capital input from 100 to 121 units, by how many percentage points will the quantity produced increase?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 17

A firm is considering two different production processes for producing a certain product. Process A requires an initial investment of ₦100,000 and has a fixed cost of ₦50,000 per unit produced. Process B requires an initial investment of ₦150,000 and has a fixed cost of ₦30,000 per unit produced. If the firm produces 1,000 units of the product, which process will result in lower total cost?

Correct A. Process A

B. Process B

C. Both processes will result in the same total cost

D. Neither process will result in lower total cost

Correct Answer: A

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Question 18

A company's marketing strategy involves a 20% discount on all products sold during a promotional period. If a customer buys a product that originally costs ₦1,000, how much will they pay after the discount?

Correct A. ₦800

B. ₦900

C. ₦1,000

D. ₦1,200

Correct Answer: A

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Question 19

A bank offers a 5% interest rate on deposits. If a customer deposits ₦10,000 for 1 year, how much interest will they earn?

Correct A. ₦500

B. ₦500.50

C. ₦500.50

D. ₦500.50

Correct Answer: A

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Question 20

A firm's production function is given by Q = 100L^0.5K^0.5, where Q is the quantity produced, L is the labor input, and K is the capital input. If the firm increases its labor input from 100 to 121 units and its capital input from 100 to 121 units, by how many percentage points will the quantity produced increase?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 21

The concept of comparative advantage in international trade is based on the idea that countries should specialize in producing goods for which they have a lower opportunity cost. Which of the following is a correct example of comparative advantage?

A. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.

B. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 150 units of cloth.

Correct C. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 100 units of cloth.

D. Country A produces 100 units of wheat and 50 units of cloth, while Country B produces 50 units of wheat and 200 units of cloth.

Correct Answer: C

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Question 22

A consumer protection law requires that all goods sold in a country must be labeled with their country of origin. Which of the following is a correct reason for this requirement?

A. To prevent counterfeiting of goods.

Correct B. To ensure that consumers are aware of the quality of the goods.

C. To prevent the sale of goods that are not in compliance with international standards.

D. To prevent the sale of goods that are not in compliance with national standards.

Correct Answer: B

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Question 23

A firm is considering two production methods for a product: method A, which requires an initial investment of ₦10,000 and produces 100 units per hour, and method B, which requires an initial investment of ₦20,000 and produces 200 units per hour. Which of the following is a correct conclusion about the two methods?

A. Method A is more profitable than method B.

Correct B. Method B is more profitable than method A.

C. Both methods are equally profitable.

D. The profitability of the two methods cannot be determined without further information.

Correct Answer: B

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Question 24

A bank offers a loan of ₦100,000 at an interest rate of 10% per annum for a period of 5 years. What is the total amount that the borrower will have to pay at the end of the 5-year period?

A. ₦150,000

B. ₦160,000

C. ₦170,000

Correct D. ₦180,000

Correct Answer: D

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Question 25

A firm's production function is given by Q = 2L^0.5K^0.5, where Q is the quantity produced, L is the number of labor hours, and K is the amount of capital invested. If the firm wants to produce 100 units of output, how many labor hours and capital invested are required?

A. L = 100, K = 100

B. L = 100, K = 200

C. L = 200, K = 100

Correct D. L = 200, K = 200

Correct Answer: D

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