Practice post utme rhema university commerce 2020 Past Questions

Question 1

A bank's liquidity ratio is calculated as the ratio of its liquid assets to its total deposits. If a bank has ₦120,000 in liquid assets and ₦180,000 in total deposits, what is its liquidity ratio?

Correct A. 0.67

B. 0.75

C. 0.83

D. 0.90

Correct Answer: A

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Question 2

A company's marketing strategy involves a 4Ps approach. Which of the following is NOT one of the 4Ps?

A. Product

B. Price

C. Promotion

Correct D. Place

Correct Answer: D

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Question 3

A firm's break-even point is the point at which its total revenue equals its total fixed costs. If a firm's total fixed costs are ₦50,000 and its selling price per unit is ₦20,000, what is its break-even point if it sells 100 units?

A. ₦2,000,000

Correct B. ₦2,500,000

C. ₦3,000,000

D. ₦3,500,000

Correct Answer: B

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Question 4

A company's foreign trade involves importing goods from a foreign country. Which of the following is a benefit of foreign trade?

A. Increased competition

B. Increased market share

Correct C. Increased access to new markets

D. Increased costs

Correct Answer: C

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Question 5

A firm's insurance policy covers it against losses due to fire. Which of the following is a type of insurance policy?

A. Life insurance

B. Health insurance

Correct C. Fire insurance

D. Liability insurance

Correct Answer: C

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Question 6

A company is considering two marketing strategies for its new product. Strategy A involves a high initial investment in advertising, but the product will be priced low to attract a large market share. Strategy B involves a lower initial investment in advertising, but the product will be priced higher to target a niche market. Which strategy is more likely to result in higher profits in the long run?

Correct A. Strategy A

B. Strategy B

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

D. Neither strategy is likely to result in higher profits

Correct Answer: A

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Question 7

A consumer purchases a product with a price of ₦500. The product has a 10% discount for the first 100 customers. If the consumer is the 101st customer, what is the price of the product?

A. ₦450

Correct B. ₦500

C. ₦550

D. ₦600

Correct Answer: B

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Question 8

A company has a sole proprietorship business with an annual revenue of ₦1,000,000. The company has a 20% tax rate. What is the company's annual tax liability?

A. ₦200,000

Correct B. ₦250,000

C. ₦300,000

D. ₦350,000

Correct Answer: B

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Question 9

A company is considering a new business venture that requires an initial investment of ₦500,000. The company expects to generate a profit of ₦200,000 in the first year, ₦250,000 in the second year, and ₦300,000 in the third year. What is the company's expected return on investment (ROI) for the first three years?

A. 20%

B. 25%

Correct C. 30%

D. 35%

Correct Answer: C

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Question 10

A company has a fleet of 10 vehicles that are used for business purposes. The company wants to purchase a new vehicle that will be used for both business and personal purposes. What type of insurance policy should the company purchase for the new vehicle?

A. Commercial insurance

B. Personal insurance

C. Business insurance

Correct D. Comprehensive insurance

Correct Answer: D

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Question 11

A company specializes in producing and selling bicycles. It has a warehouse with a storage capacity of 10,000 units. The company's production manager wants to store the bicycles in a way that minimizes the space used. If the bicycles are packed in boxes of 5 units each, what is the maximum number of boxes that can be stored in the warehouse?

A. 500

Correct B. 1000

C. 2000

D. 5000

Correct Answer: B

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Question 12

A consumer protection agency is investigating a complaint about a company's advertising practices. The company has advertised a product as '100% effective' in treating a certain medical condition. However, the agency has found that the product has only been tested on a small sample of 100 people, and the results showed that it was effective in 90% of the cases. What is the most appropriate conclusion that the agency can draw from this information?

A. The product is 100% effective in treating the medical condition.

Correct B. The product is effective in 90% of the cases, but the sample size is too small to draw a conclusion.

C. The product is not effective in treating the medical condition.

D. The product is effective in treating the medical condition, but the company's advertising practices are misleading.

Correct Answer: B

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Question 13

A company is considering setting up a new production line to manufacture a new product. The production line will require an initial investment of ₦10 million and will generate an annual revenue of ₦5 million. However, the company expects the market demand for the product to decrease by 20% each year. What is the minimum number of years that the company must operate the production line to break even?

A. 2 years

Correct B. 3 years

C. 4 years

D. 5 years

Correct Answer: B

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Question 14

A sole trader is selling a business to a limited company. The sole trader has assets worth ₦1 million and liabilities of ₦500,000. The limited company is willing to pay ₦1.2 million for the business. What is the profit that the sole trader will make from the sale?

Correct A. ₦700,000

B. ₦800,000

C. ₦900,000

D. ₦1,000,000

Correct Answer: A

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Question 15

A company is considering investing in a new project that requires an initial investment of ₦5 million. The project is expected to generate an annual revenue of ₦2 million for 5 years, and then an annual revenue of ₦1.5 million for the next 5 years. What is the net present value of the project, assuming a discount rate of 10%?

A. ₦10,000

Correct B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: B

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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 its 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 mutually exclusive projects. Project A has a 60% chance of success and a 40% chance of failure, with a payoff of ₦1,000,000 if it succeeds and a loss of ₦500,000 if it fails. Project B has a 70% chance of success and a 30% chance of failure, with a payoff of ₦1,500,000 if it succeeds and a loss of ₦200,000 if it fails. Which project should the firm choose?

A. Project A

Correct B. Project B

C. Neither project

D. Both projects

Correct Answer: B

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Question 18

A warehouse has a storage capacity of 10,000 units. The warehouse is currently 70% full, with 7,000 units stored. If 2,000 more units are added to the warehouse, what percentage of the warehouse's capacity will be occupied?

A. 60%

B. 70%

Correct C. 80%

D. 90%

Correct Answer: C

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Question 19

A company is considering exporting its products to a foreign market. The company's export manager estimates that the demand for the product in the foreign market will be 10,000 units per year, with a price of ₦500 per unit. If the company's production cost is ₦300 per unit, and the company wants to make a profit of 20% on its sales, what should be the minimum price at which the company should sell the product in the foreign market?

A. ₦600

B. ₦650

Correct C. ₦700

D. ₦750

Correct Answer: C

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Question 20

A sole trader has a business income of ₦1,000,000 and a business expense of ₦500,000. If the sole trader wants to pay a tax of 20% on its business income, how much tax will the sole trader pay?

A. ₦100,000

Correct B. ₦150,000

C. ₦200,000

D. ₦250,000

Correct Answer: B

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Question 21

A company is considering two different insurance policies to cover its business operations. Policy A has a premium of ₦150,000 and a deductible of ₦50,000. Policy B has a premium of ₦120,000 and a deductible of ₦20,000. If the company expects to incur an average loss of ₦80,000 per year, which policy should it choose?

A. Policy A

Correct B. Policy B

C. Both policies are equally good

D. Neither policy is suitable

Correct Answer: B

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Question 22

A sole trader is considering expanding its business operations to include a new product line. The new product line is expected to generate an additional ₦500,000 in revenue per year, but it will also require an additional ₦200,000 in expenses per year. What is the expected increase in profit for the sole trader?

Correct A. ₦300,000

B. ₦400,000

C. ₦500,000

D. ₦600,000

Correct Answer: A

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Question 23

A company is considering launching a new advertising campaign to promote its product. The company has estimated that the campaign will cost ₦1,000,000 and is expected to generate an additional ₦2,000,000 in revenue. What is the expected return on investment (ROI) for the company?

A. 100%

Correct B. 200%

C. 300%

D. 400%

Correct Answer: B

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Question 24

A consumer has purchased a product from a company and is dissatisfied with its quality. The consumer has filed a complaint with the company, but the company has refused to take any action. What is the consumer's next course of action?

A. File a lawsuit against the company

Correct B. Contact the consumer protection agency

C. Post a negative review online

D. Return the product and demand a refund

Correct Answer: B

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Question 25

A company is considering forming a partnership with another company to expand its business operations. The partnership agreement will require the companies to share profits and losses equally. What is the main advantage of forming a partnership?

A. Increased revenue

B. Reduced expenses

Correct C. Shared risk and reward

D. Improved brand reputation

Correct Answer: C

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