Practice waec model questions vol1 commerce 2019 Past Questions

Question 1 View Details

A trader bought 50 items at ₦200 each and sold all of them at a uniform price, making a total profit of ₦5,000. What was the selling price per item?

A. ₦250

B. ₦280

Correct C. ₦300

D. ₦320

Correct Answer: C

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Question 2 View Details

An importer wants to bring 10,000 kg of cocoa into Nigeria. The world market price is $2.50 per kg. The exchange rate is ₦410 per $. Import duty is 15% of the CIF value. Shipping costs ₦120 per kg, but a 5% discount on shipping is given for shipments above 8,000 kg. What is the total amount in Naira that the importer must pay?

A. ₦12,950,000

B. ₦13,250,000

C. ₦13,098,000

Correct D. ₦13,098,500

Correct Answer: D

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Question 3 View Details

A small business needs ₦5,000,000 for equipment. It can either (A) obtain a bank loan at 12% simple interest per annum for 3 years plus a processing fee of 2% of the principal, or (B) issue commercial paper at 10% interest per annum compounded annually for 3 years with no fees. Which option results in the lower total repayment and what are the total amounts payable for both options?

A. Option B is cheaper; total repayment Option A = ₦7,000,000, Option B = ₦6,600,000

B. Option B is cheaper; total repayment Option A = ₦6,950,000, Option B = ₦6,650,000

C. Option A is cheaper; total repayment Option A = ₦6,800,000, Option B = ₦6,900,000

Correct D. Option B is cheaper; total repayment Option A = ₦6,900,000, Option B = ₦6,655,000

Correct Answer: D

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Question 4 View Details

At month‑end, a company's cash book shows a balance of ₦2,350,000. The bank statement balance is ₦2,500,000. The following items are noted: (i) deposits in transit of ₦150,000 not yet reflected in the bank statement; (ii) outstanding checks totalling ₦120,000; (iii) bank service charges of ₦5,000 not recorded in the cash book; (iv) a note receivable of ₦80,000 collected by the bank but not yet recorded by the company. What is the corrected cash book balance after reconciliation?

A. ₦2,440,000

Correct B. ₦2,425,000

C. ₦2,380,000

D. ₦2,415,000

Correct Answer: B

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Question 5 View Details

An insurance company estimates the annual fire‑loss cost for a factory at ₦2,500,000. It adds a loading of 30% to cover expenses and profit, then offers a 10% discount on the gross premium for policies paid annually in advance. A government subsidy further reduces the net premium by ₦150,000. What is the final premium the factory must pay?

A. ₦3,025,000

B. ₦2,925,000

Correct C. ₦2,775,000

D. ₦2,790,000

Correct Answer: C

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Question 6 View Details

A consumer purchased a television for ₦150,000 with a 1‑year warranty. The TV failed after 4 months. The seller offered to repair it, but the consumer waited 50 days for the repair and none was done. The consumer can either (A) demand a replacement, for which the law allows the price plus 12% simple interest per annum calculated from the date of purchase to the date the replacement is delivered (30 days after the demand), with the interest amount capped at 25% of the price, or (B) rescind the contract and obtain a full refund together with damages equal to 15% of the price. Assuming the consumer makes the demand for replacement on the 50th day after the failure, which option gives the higher monetary recovery and what is that amount?

A. ₦165,000

Correct B. ₦172,500

C. ₦150,000

D. ₦159,862.50

Correct Answer: B

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Question 7 View Details

A retailer orders product X for its store. Annual demand for X is 12,000 units. The ordering cost per order is ₦5,000. The unit cost is ₦200 and the holding cost is 20% of the unit cost per year. The warehouse can hold at most 800 units at any time. There is no lead‑time and no stock‑out penalty. Determine the order quantity that minimises the total annual cost, respecting the warehouse capacity, and compute that minimum total cost.

A. 800 units, ₦85,000

Correct B. 800 units, ₦91,000

C. 800 units, ₦95,000

D. 600 units, ₦84,000

Correct Answer: B

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Question 8 View Details

A firm needs ₦10,000,000 for a new project. It can raise the funds by a bank loan at a nominal interest rate of 12% per annum (interest is tax‑deductible) and by issuing ordinary shares whose cost of equity is 18% per annum. The corporate tax rate is 30%. Management wants to keep the proportion of debt in the capital structure at or below 40% because of risk considerations. What is the optimal mix of debt and equity (in naira) that minimises the weighted average cost of capital (WACC) and what is the resulting WACC (expressed as a percentage to two decimal places)?

A. Debt ₦5,000,000, Equity ₦5,000,000, WACC 13.50%

Correct B. Debt ₦4,000,000, Equity ₦6,000,000, WACC 14.16%

C. Debt ₦3,000,000, Equity ₦7,000,000, WACC 14.70%

D. Debt ₦4,500,000, Equity ₦5,500,000, WACC 13.90%

Correct Answer: B

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Question 9 View Details

A borrower is considering two loan offers for a principal amount of ₦5,000,000 to be repaid over 3 years. Offer A: nominal annual interest rate 10% compounded monthly, processing fee ₦50,000 payable at loan disbursement. Offer B: nominal annual interest rate 9% compounded quarterly, arrangement fee equal to 1% of the loan amount payable at the start, and a discount of ₦30,000 on the principal (the borrower receives ₦4,970,000 but must repay interest on the full ₦5,000,000). Assuming simple interest is used for the purpose of comparing total cost, calculate the effective annual rate (EAR) for each offer (to two decimal places) and state which offer results in the lower total cost to the borrower.

A. Offer A EAR 10.33%, Offer B EAR 9.39%; cheaper is Offer A

B. Offer A EAR 10.45%, Offer B EAR 9.20%; cheaper is Offer A

C. Offer A EAR 10.10%, Offer B EAR 9.50%; cheaper is Offer B

Correct D. Offer A EAR 10.33%, Offer B EAR 9.39%; cheaper is Offer B

Correct Answer: D

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Question 10 View Details

A motorist buys a comprehensive insurance policy for a car valued at ₦2,500,000. The base premium is 4% of the insured value. The insurer adds a loading of 25% because the car is kept in a high‑risk area and also adds a surcharge of 10% because the driver is 23 years old. A policy tax of 5% is then applied to the premium after loading and surcharge. The driver had no claims in the previous year, so a no‑claim bonus (NCB) of 15% is granted on the premium after loading and surcharge but before tax. Calculate the final premium payable (rounded to the nearest naira) and state the minimum claim amount that would make the driver break even (i.e., the claim amount equals the premium paid).

A. ₦128,000

B. ₦124,800

Correct C. ₦122,719

D. ₦119,500

Correct Answer: C

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Question 11 View Details

A trading firm stores a product in a warehouse. Each unit occupies 0.02 m³ and the warehouse height is 3 m. The warehouse rent is ₦150 per m² per month. The product's unit cost is ₦500 and the carrying rate is 25 % per annum. The ordering cost per order is ₦2 000 and the annual demand is 12 000 units. The usable floor area of the warehouse is 3 m². Assuming the firm wants to minimise its total annual cost, what is the maximum order quantity (in units) that can be ordered each time without exceeding the available floor space?

Correct A. 450

B. 500

C. 600

D. 400

Correct Answer: A

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Question 12 View Details

A company subscribes to a mobile telephone plan that charges a fixed monthly fee of ₦5 000 covering the first 200 minutes of calls. The next 300 minutes (i.e., minutes 201‑500) are billed at ₦30 per minute and any minute beyond 500 is billed at ₦20 per minute. If the total minutes used in a month are 950 and the company receives a 10 % rebate on the total bill when the usage exceeds 800 minutes, what is the amount payable for that month (in naira) after the rebate?

A. 23000

B. 22100

C. 24750

Correct D. 20700

Correct Answer: D

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Question 13 View Details

An investor purchases 100 shares of XYZ Ltd at ₦250 each and later buys another 150 shares at ₦300 each. XYZ then announces a 2‑for‑1 stock split. After the split the investor sells 200 shares at ₦210 each. What is the investor's net profit (in naira) from these transactions?

A. 16000

B. 12000

Correct C. 14000

D. 10000

Correct Answer: C

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Question 14 View Details

A trader buys goods for ₦8 000 and sells them for ₦10 000. What is the profit percentage?

A. 15

B. 20

C. 30

Correct D. 25

Correct Answer: D

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Question 15 View Details

Three partners A, B and C invest capital in a partnership for different periods: A invests ₦50 000 for 6 months, B invests ₦30 000 for 9 months and C invests ₦20 000 for 12 months. At the end of the year the partnership records a profit of ₦48 000 which is to be shared in proportion to each partner's capital‑months. How much profit does partner B receive (in naira)?

A. 18000

B. 14400

C. 12000

Correct D. 16000

Correct Answer: D

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Question 16 View Details

A retailer purchases 120 units of a product at ₦250 each. He adds a markup of 20 % on the total cost and then offers a discount of 5 % on the marked price to a customer. What is the selling price per unit (in naira) after the discount?

A. 275

Correct B. 285

C. 300

D. 260

Correct Answer: B

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Question 17 View Details

A consumer bought a washing machine for ₦150,000 with a 2‑year warranty covering free repairs. After 18 months the machine fails. The seller offers two options: (i) repair the machine for ₦12,000 and give a 10 % discount on the consumer's next purchase; (ii) replace the machine at 80 % of the original price and give a 5 % discount on the next purchase. The consumer plans to buy a refrigerator costing ₦200,000 within the next year. Which option results in the lower total outlay for the consumer, and what is that total amount?

Correct A. Option (i) with total ₦192,000

B. Option (ii) with total ₦192,000

C. Option (i) with total ₦200,000

D. Option (ii) with total ₦176,000

Correct Answer: A

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Question 18 View Details

A trader ships 650 kg of goods to a market 350 km away by road. The freight rate is ₦150 per km for the first 200 km and ₦120 per km for each additional kilometre. A handling charge of ₦5,000 applies for shipments up to 500 kg, and ₦8,000 for shipments above 500 kg. What is the total freight cost (in naira) for this shipment?

A. 58000

Correct B. 56000

C. 48000

D. 54000

Correct Answer: B

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Question 19 View Details

An importer intends to purchase 10,000 units of a product priced at $2.50 per unit. The exchange rate is ₦410 per $. Import duty is 12 % of the CIF value, and the bank charges 1.5 % of the total amount in naira for foreign‑exchange conversion. The importer wants to earn an 18 % profit on the total landed cost (CIF + duty + bank charges). What selling price per unit (in naira) should be set to achieve this profit margin?

A. 1165

B. 1348

C. 1373

Correct D. 1375

Correct Answer: D

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Question 20 View Details

During a fiscal year a country exported goods worth ₦8.4 billion and imported goods worth ₦7.1 billion. State whether the country recorded a trade surplus or deficit and give the amount (in billions of naira).

A. Trade deficit of 0.7 billion naira

Correct B. Trade surplus of 1.3 billion naira

C. Trade deficit of 1.3 billion naira

D. Trade surplus of 0.7 billion naira

Correct Answer: B

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Question 21 View Details

A customer deposits ₦150,000 in a bank that offers 12% per annum compound interest, compounded semi‑annually. At the end of each half‑year the bank also deducts a service charge equal to 0.5% of the balance after interest has been credited. What amount will be in the account after 3 years?

A. 209310

Correct B. 206473

C. 207842

D. 204915

Correct Answer: B

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Question 22 View Details

A trader buys 50 wooden chairs at ₦12,000 each and sells them at a uniform price. If his total profit is ₦30,000, what is the selling price per chair?

A. 12800

B. 12400

Correct C. 12600

D. 13000

Correct Answer: C

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Question 23 View Details

A wholesaler purchases 200 units of a product for a total of ₦480,000. He marks up each unit by 25% on its cost price and offers a 10% trade discount on the marked price to retailers who buy more than 120 units. How much will a retailer pay for 150 units?

Correct A. 405000

B. 378000

C. 450000

D. 432000

Correct Answer: A

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Question 24 View Details

An advertising agency proposes a TV commercial campaign. The commercial will be aired 3 times a week for 8 weeks (total 24 airings). Each airing reaches an estimated audience of 250,000 viewers. The agency charges a fixed production cost of ₦1,200,000 and a broadcasting fee of ₦45,000 per airing. The client requires a return on advertising spend (ROAS) of at least 4 (i.e., for every naira spent, at least ₦4 in sales revenue must be generated). If the product sold yields a profit margin of 20% and each unit sells for ₦5,000, what is the minimum total sales revenue the client must achieve to meet the ROAS target, and how many units must be sold?

A. 6840000; 1368

B. 4320000; 864

Correct C. 9120000; 1824

D. 9120000; 1459

Correct Answer: C

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Question 25 View Details

A retail shop sells an item with a regular selling price of ₦8,500 per unit. During a seasonal promotion the shop offers a 12% discount on the selling price. In addition, for every 10 units purchased the shop gives a free accessory worth ₦1,200 (cost to the shop). If a customer buys 30 units during the promotion, how much does the customer pay in total and what is the shop's total profit from this transaction? Assume the shop's cost price per unit is ₦5,500 and the accessory cost is incurred by the shop.

A. 255000; 86400

B. 224400; 59400

C. 224400; 57000

Correct D. 224400; 55800

Correct Answer: D

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