waec model questions vol1 2019 commerce | Essay

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Question 1 View Details
Consider the role of commerce in the modern Nigerian economy.
Question Parts
(a)
Explain three major functions of commerce and illustrate each with a relevant example from Nigeria.
(b)
Distinguish between goods and services, giving two examples of each that are significant in Nigeria's economy.
(c)
Discuss how money facilitates commercial transactions, highlighting at least two of its functions.
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Question 2 View Details
A Nigerian trading company imports electronic gadgets and exports agricultural products. The following data relate to its foreign trade for the year 2022: - Total imports: $12 million - Total exports: $8 million - Average exchange rate during the year: 1 USD = ₦460 - The government imposes a 10 % tariff on imported gadgets valued at $5 million of the total imports. - The company receives a 5 % export rebate on its agricultural exports valued at $3 million of the total exports. Assume all other imports and exports are untaxed and unreimbursed.
Question Parts
(a)
Calculate the trade balance in naira before accounting for the tariff and the export rebate.
(b)
Determine the net effect of the tariff and the export rebate on the company's foreign‑exchange earnings in naira.
(c)
If the exchange rate at the end of the year rises to 1 USD = ₦480, calculate the difference in naira that the company would have realized on its net foreign trade (exports minus imports) compared with using the average rate of ₦460.
(d)
Discuss two possible macro‑economic implications for Nigeria if many firms experience similar net foreign‑exchange outcomes as in parts (b) and (c).
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Question 3 View Details
A small retail shop in Lagos deals in the sale of electronic accessories. During the month of June, the shop recorded the following data: - Opening stock: 150 units valued at ₦30,000 - Purchases: 500 units costing ₦120,000 in total - Closing stock: 180 units valued at ₦36,000 - Selling price per unit: ₦350 - Expenses incurred: * Rent: ₦20,000 * Salaries: ₦45,000 * Utilities: ₦5,000 * Advertising: ₦8,000 Using this information, answer the questions that follow.
Question Parts
(a)
Calculate the Cost of Goods Sold (COGS) for the month.
(b)
Determine the gross profit for the month.
(c)
Calculate the net profit after deducting all expenses.
(d)
The owner wishes to achieve a net profit margin of at least 15 % of sales. Assuming the sales volume (470 units) remains unchanged and all other costs stay the same, by how much should the selling price per unit be increased?
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Question 4 View Details
Nigeria imports wheat and exports cocoa. In the first quarter of 2022 the following data were recorded: - Wheat imports: 200,000 tonnes at an average import price of ₦45,000 per tonne. - Cocoa exports: 150,000 tonnes at an average export price of ₦60,000 per tonne. - Exchange rate: beginning of quarter US$1 = ₦410, end of quarter US$1 = ₦420. - Tariff on wheat imports: 5 % of the import value. - Export duty on cocoa: 10 % of the export value. - Shipping and handling cost: ₦2,000 per tonne for both imports and exports. All transactions are settled in US dollars at the average of the beginning and end exchange rates. Answer the questions that follow.
Question Parts
(a)
Calculate the total value of wheat imports in Naira after adding the 5 % tariff and shipping costs.
(b)
Calculate the total value of cocoa exports in Naira after deducting the 10 % export duty and adding shipping costs.
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Question 5 View Details
Explain the role of entrepreneurship in the economic development of Nigeria.
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Question 6 View Details
A retailer recorded the following figures for the last financial year:
Question Parts
(a)
Determine the net sales.
(b)
Calculate the gross profit margin expressed as a percentage.
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Question 7 View Details
XYZ Traders is a partnership that has been operating for five years. The partners are considering converting the business into a private limited company. The partnership currently has four partners, each contributing equal capital of ₦2,500,000. The business owns a piece of land valued at ₦10,000,000 and equipment worth ₦5,000,000. The partners are concerned about liability, continuity, and access to finance.
Question Parts
(a)
Explain three legal differences between a partnership and a private limited company in Nigeria.
(b)
Discuss how conversion to a private limited company would affect the partners’ personal liability and the continuity of the business.
(c)
The partners estimate that as a private limited company they could raise external finance of up to ₦20,000,000 at an average cost of 12% per annum, whereas as a partnership they could only obtain a bank loan of ₦8,000,000 at 15% per annum. Assuming the business needs ₦15,000,000 for expansion, evaluate which form of organization is more financially advantageous, showing calculations of annual interest cost for each option.
(d)
Summarise two non‑financial advantages and two non‑financial disadvantages of converting to a private limited company.
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Question 8 View Details
ABC Manufacturing Ltd is planning to introduce a new product line. The projected cash outflow for the project is ₦30,000,000, to be incurred at the start of the project. The company expects the project to generate cash inflows of ₦12,000,000 at the end of each of the next three years. The firm currently has retained earnings of ₦10,000,000 and a line of credit with a bank that can be drawn up to ₦15,000,000 at an interest rate of 10% per annum payable annually. The company also has the option to issue 5‑year debentures at a coupon rate of 9% with a flotation cost of 2% of the issue amount, and to raise equity by issuing new ordinary shares at a market price of ₦500 per share, with an expected dividend yield of 8%.
Question Parts
(a)
Identify and explain two internal and two external sources of finance that ABC Manufacturing could use for the project, highlighting the main features of each source.
(b)
Calculate the total cost (including interest and flotation costs) of financing the project using the bank line of credit for the required amount, assuming the entire ₦30,000,000 is borrowed and repaid at the end of year 3.
(c)
Determine the amount of debentures that must be issued to raise the remaining financing after using retained earnings and the bank line of credit, and compute the annual interest payment on those debentures (ignore tax effects). Show your working.
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