waec model questions vol1 2017 commerce | Essay

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Question 1 View Details
A small retail business in Lagos is considering expanding its operations by using electronic commerce (e‑commerce).
Question Parts
(a)
State three major functions of commerce and give a brief example for each.
(b)
Explain how the introduction of e‑commerce can change the role of middlemen in the distribution chain.
(c)
Evaluate one advantage and one disadvantage of e‑commerce for consumers in Nigeria.
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Question 2 View Details
The table below shows Nigeria’s export and import of two major commodities over the period 2020‑2023. | Year | Export Quantity (million tonnes) | Export Price (₦ per tonne) | Import Quantity (million tonnes) | Import Price (₦ per tonne) | |------|----------------------------------|----------------------------|----------------------------------|----------------------------| | 2020 | 2.5 | 250 | 1.2 | 300 | | 2023 | 3.0 | 260 | 1.5 | 320 | Using this information, answer the following questions:
Question Parts
(a)
Calculate the total export revenue and total import expenditure for each year.
(b)
Determine the average annual growth rate (compound) of export revenue and import expenditure between 2020 and 2023.
(c)
Compute the terms of trade for each year (expressed as a percentage) and comment on the trend observed.
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Question 3 View Details
A young entrepreneur decides to start a home‑based tailoring business. She purchases a new sewing machine costing ₦120,000. She pays a 20 % down‑payment and the balance is financed in four equal monthly instalments. Her monthly operating costs are: rent ₦5,000, electricity ₦2,000. Each shirt requires fabric costing ₦1,200 and is sold for ₦3,500. Assume the instalment amount is the only monthly fixed cost related to the machine. Using this information, answer the following questions.
Question Parts
(a)
Determine the break‑even quantity of shirts the entrepreneur must sell each month.
(b)
If she wishes to earn a profit of ₦15,000 in a month, how many shirts must she sell?
(c)
Discuss two non‑financial factors that could affect the success of her home‑based tailoring business.
(d)
Suppose she raises the selling price by 10 % and, as a result, the quantity demanded falls by 8 % from the break‑even quantity found in part (a). Calculate the new monthly profit (or loss).
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Question 4 View Details
Nigeria imports wheat for its flour mills and exports cocoa beans. The data for the current fiscal year are as follows: - Wheat import quantity: 200,000 tonnes - World price of wheat: $300 per tonne - Exchange rate: ₦460 per US$1 - Cocoa export quantity: 150,000 tonnes - World price of cocoa: $500 per tonne The government imposes a 5 % tariff on wheat imports and grants a 2 % rebate on cocoa export earnings. The central bank projects that the naira will depreciate by 5 % against the dollar next year. Using this information, answer the questions below.
Question Parts
(a)
Calculate the total value of wheat imports in naira before the tariff and after the 5 % tariff is applied.
(b)
Compute the total earnings from cocoa exports in naira after the 2 % export rebate is applied.
(c)
Determine the trade balance (exports minus imports) for the year after the tariff and rebate have been applied.
(d)
If the naira depreciates by 5 % next year, discuss qualitatively how this depreciation will affect the real value of wheat imports and cocoa exports, and the likely impact on the trade balance.
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Question 5 View Details
A retailer purchases a batch of 500 units of a product at a total cost of ₦250,000. The retailer intends to apply a markup based on the cost price to achieve a desired profit margin. However, the retailer also offers a seasonal discount to customers. The retailer's fixed overheads for the month are ₦30,000. The retailer expects to sell all units within the month.
Question Parts
(a)
Determine the selling price per unit if the retailer wants to earn a profit of 20 % on the total cost of the batch (before considering overheads).
(b)
Calculate the break‑even number of units the retailer must sell if the selling price from part (a) is used and the overheads are incurred.
(c)
Suppose the retailer decides to give a 10 % discount on the selling price calculated in part (a) to stimulate sales. Re‑calculate the break‑even quantity under this discounted price.
(d)
Discuss two advantages and two disadvantages of using a discount strategy for a retailer in the context of the above scenario.
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Question 6 View Details
A wholesaler purchases 2,000 units of a product from a manufacturer at a list price of ₦1,200 per unit. The manufacturer offers a trade discount of 12 % on the list price. The wholesaler pays the balance within 10 days and is eligible for a cash discount of 3 % on the amount after trade discount. The wholesaler's operating expenses amount to ₦150,000 per month, and the wholesaler plans to sell the entire stock within the month.
Question Parts
(a)
Compute the effective purchase price per unit after applying the trade discount and the cash discount.
(b)
Determine the total cost incurred by the wholesaler for the whole stock, including operating expenses.
(c)
If the wholesaler sets a uniform selling price of ₦1,500 per unit to retailers, calculate the gross profit and the profit margin (as a percentage of sales).
(d)
The wholesaler is considering offering a 5 % trade discount to retailers on the selling price while keeping the cash discount terms unchanged for retailers who pay within 10 days. Assuming the wholesaler continues to sell all units, compute the new gross profit and compare it with the profit in part (c). State whether the discount policy improves or reduces the wholesaler’s profitability.
(e)
Briefly explain two reasons why a wholesaler might prefer to give trade discounts to retailers rather than reducing the cash discount period.
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Question 7 View Details
A group of entrepreneurs is planning to start a new venture called EcoTech Ltd. The venture will involve manufacturing of eco‑friendly packaging materials. The entrepreneurs need to decide on the most suitable form of business organization and also need to allocate the profit for the first year of operation.
Question Parts
(a)
State three major types of business organisations in Nigeria and give one key characteristic of each.
(b)
Considering the nature of EcoTech Ltd (high capital requirement, need for limited liability and ability to raise large funds), recommend the most appropriate form of business organisation and justify your choice with at least three reasons.
(c)
A partnership of three partners A, B and C invests capital of ₦200,000, ₦300,000 and ₦500,000 respectively. They agree that profit will be shared in proportion to capital contributed and that partner C will receive an additional 5 % of the total profit for managing the business. If the total profit for the year is ₦120,000, calculate the amount each partner receives.
(d)
Identify two potential disadvantages of the private limited company recommended in part (b) and suggest one mitigation strategy for each disadvantage.
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Question 8 View Details
GreenManufacture Ltd, a medium‑size manufacturing firm, plans to expand its production capacity. The expansion requires a total outlay of ₦5,000,000. The management is evaluating three possible sources of finance.
Question Parts
(a)
List three internal and three external sources of finance available to a medium‑size enterprise and give one advantage of each source.
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