Practice post utme pan-atlantic university commerce 2017 Past Questions

Question 1

A sole trader's business is exposed to a risk of loss due to a fire in the premises. The insurance company offers a policy with a premium of ₦120,000 and a deductible of ₦50,000. If the business suffers a loss of ₦200,000, what is the maximum amount the business will have to pay?

A. ₦50,000

Correct B. ₦100,000

C. ₦150,000

D. ₦200,000

Correct Answer: B

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Question 2

A company is considering two different marketing strategies for its new product. Strategy A involves a high initial investment of ₦1,000,000 and a marketing budget of ₦500,000 per year for 5 years. Strategy B involves a low initial investment of ₦200,000 and a marketing budget of ₦750,000 per year for 5 years. Which strategy is more likely to result in higher sales?

Correct A. Strategy A

B. Strategy B

C. Both strategies are equally likely to result in higher sales

D. Neither strategy is likely to result in higher sales

Correct Answer: A

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Question 3

A bank offers a loan of ₦1,000,000 at an interest rate of 12% per annum compounded annually. If the loan is repaid after 5 years, what is the total amount paid by the borrower?

Correct A. ₦1,625,937.42

B. ₦1,628,937.42

C. ₦1,631,937.42

D. ₦1,634,937.42

Correct Answer: A

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Question 4

A company's financial statements show that its revenue increased by 15% and its expenses decreased by 10% compared to the previous year. What is the percentage increase in net profit?

A. 5%

Correct B. 10%

C. 15%

D. 20%

Correct Answer: B

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Question 5

A sole trader's business is exposed to a risk of loss due to a fire in the premises. The insurance company offers a policy with a premium of ₦120,000 and a deductible of ₦50,000. If the business suffers a loss of ₦200,000, what is the maximum amount the business will have to pay?

A. ₦50,000

Correct B. ₦100,000

C. ₦150,000

D. ₦200,000

Correct Answer: B

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Question 6

A company's marketing strategy involves a mix of advertising, sales promotions, and public relations. Which of the following is NOT a characteristic of a well-planned marketing strategy?

A. It is focused on a specific target market

B. It is flexible and adaptable to changing market conditions

C. It is based on a thorough analysis of the company's resources and capabilities

Correct D. It is solely focused on increasing sales revenue

Correct Answer: D

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Question 7

A firm's cost of capital is the minimum return that investors demand for their investment in the firm. Which of the following is NOT a component of a firm's cost of capital?

A. Debt financing

B. Equity financing

C. Preferred stock financing

Correct D. Government grants

Correct Answer: D

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Question 8

A company's supply chain involves the movement of goods, services, and information from raw materials to end customers. Which of the following is a type of supply chain risk?

A. Operational risk

B. Financial risk

C. Strategic risk

Correct D. Environmental risk

Correct Answer: D

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Question 9

A firm's competitive advantage is the unique value proposition that differentiates it from its competitors. Which of the following is NOT a source of a firm's competitive advantage?

A. Patents and copyrights

B. Trade secrets

Correct C. Government subsidies

D. Brand recognition

Correct Answer: C

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Question 10

A company's market research involves the collection and analysis of data about its target market. Which of the following is a type of market research?

A. Primary research

B. Secondary research

C. Qualitative research

Correct D. Quantitative research

Correct Answer: D

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Question 11

In a perfectly competitive market, the supply curve is downward sloping because of the law of increasing marginal opportunity cost. What is the name of this law?

A. Law of Diminishing Marginal Utility

Correct B. Law of Increasing Marginal Opportunity Cost

C. Law of Diminishing Returns

D. Law of Constant Opportunity Cost

Correct Answer: B

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Question 12

A firm's revenue is maximized when the marginal revenue equals the marginal cost. What is the name of this rule?

A. Law of Diminishing Marginal Utility

B. Law of Increasing Marginal Opportunity Cost

Correct C. Marginal Revenue Rule

D. Marginal Cost Rule

Correct Answer: C

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Question 13

A consumer's demand curve is downward sloping because of the law of diminishing marginal utility. What is the name of this law?

Correct A. Law of Diminishing Marginal Utility

B. Law of Increasing Marginal Opportunity Cost

C. Law of Diminishing Returns

D. Law of Constant Opportunity Cost

Correct Answer: A

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Question 14

A firm's supply curve is upward sloping because of the law of increasing marginal opportunity cost. What is the name of this law?

A. Law of Diminishing Marginal Utility

Correct B. Law of Increasing Marginal Opportunity Cost

C. Law of Diminishing Returns

D. Law of Constant Opportunity Cost

Correct Answer: B

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Question 15

A consumer's demand curve is upward sloping because of the law of increasing marginal utility. What is the name of this law?

A. Law of Diminishing Marginal Utility

Correct B. Law of Increasing Marginal Opportunity Cost

C. Law of Diminishing Returns

D. Law of Constant Opportunity Cost

Correct Answer: B

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Question 16

A company's marketing strategy involves a mix of advertising, sales promotions, and public relations. Which of the following is a key objective of advertising in this context?

Correct A. To create awareness about the company's products

B. To increase sales revenue

C. To build brand loyalty

D. To reduce production costs

Correct Answer: A

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Question 17

A sole trader is required to keep records of all financial transactions. Which of the following is a type of record that a sole trader must keep?

A. Cash book

B. Sales ledger

C. Purchase ledger

Correct D. Journal

Correct Answer: D

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Question 18

A consumer has purchased a product on hire-purchase terms. Which of the following is a key right of the consumer under the Hire-Purchase Act?

Correct A. The right to terminate the agreement

B. The right to assign the agreement

C. The right to receive a refund of the deposit

D. The right to claim damages for breach of contract

Correct Answer: A

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Question 19

A company has issued 100,000 ordinary shares of ₦10 each. If the company has a share capital of ₦1,000,000, what is the percentage of the share capital represented by the ordinary shares?

A. 10%

Correct B. 20%

C. 30%

D. 40%

Correct Answer: B

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Question 20

A sole trader has incurred a loss of ₦50,000 in the current year. If the sole trader has a profit of ₦20,000 in the previous year, what is the total profit or loss for the two years?

Correct A. ₦-30,000

B. ₦-20,000

C. ₦-10,000

D. ₦30,000

Correct Answer: A

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Question 21

In a sole proprietorship, the owner's personal assets are

Correct A. liable for all business debts

B. liable for business debts but not personal assets

C. not liable for business debts

D. liable for personal assets but not business debts

Correct Answer: A

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Question 22

A company's articles of association can be amended by

A. a simple majority vote

Correct B. a two-thirds majority vote

C. a unanimous vote

D. a vote by the board of directors

Correct Answer: B

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Question 23

The concept of 'caveat emptor' in consumer protection means

Correct A. let the buyer beware

B. let the seller beware

C. let the consumer beware

D. let the government beware

Correct Answer: A

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Question 24

A foreign trade agreement between two countries can be classified as

Correct A. a bilateral agreement

B. a multilateral agreement

C. a regional agreement

D. a global agreement

Correct Answer: A

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Question 25

The 'principle of indemnity' in insurance means

Correct A. the insurer must pay the full amount of the loss

B. the insurer must pay the actual cash value of the loss

C. the insurer must pay the market value of the loss

D. the insurer must pay the face value of the loss

Correct Answer: A

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