Practice waec model questions vol1 commerce 2021 Past Questions

Question 1 View Details

A small manufacturing firm needs to raise ₦6,000,000 in capital. It can obtain a short‑term loan at 10% per annum and a long‑term loan at 14% per annum. The total interest payable in the first year must not exceed ₦800,000 and the short‑term loan may not exceed 30% of the total loan amount. What is the maximum amount that can be obtained as a short‑term loan?

A. 1200000

B. 2000000

Correct C. 1800000

D. 1500000

Correct Answer: C

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Question 2 View Details

A company communicates with its customers by sending SMS messages and printed letters. Each SMS costs ₦15. Each printed letter has a base cost of ₦120, but if more than 100 letters are sent in a month a bulk discount of 10% is applied to the total letter cost before a 5% VAT is added. In a particular month the company sent twice as many SMS as letters and the total amount spent on SMS and letters (after discount and VAT) was ₦21,510. How many printed letters were sent that month?

A. 130

B. 170

C. 190

Correct D. 150

Correct Answer: D

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Question 3 View Details

A customer deposits ₦500,000 in a bank account that pays 8% per annum compounded semi‑annually. After 2 years the customer withdraws part of the balance, leaving the remainder to stay in the account for another 3 years. The amount withdrawn is exactly equal to the interest that would have been earned on the remaining balance during those 3 years at the same rate. How much money was withdrawn?

A. 124000

Correct B. 122630

C. 115000

D. 130000

Correct Answer: B

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Question 4 View Details

A home baker sells chocolate cakes for ₦2,500 each and vanilla cakes for ₦2,000 each. The variable cost per chocolate cake is ₦1,200 and per vanilla cake is ₦1,000. Fixed monthly costs are ₦150,000. The baker wants a profit of at least ₦50,000 each month. Because of oven capacity, the total number of cakes baked cannot exceed 200, and at least 30% of the cakes must be chocolate. What is the minimum number of chocolate cakes the baker must sell to meet the profit target?

A. 45

B. 55

Correct C. 60

D. 70

Correct Answer: C

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Question 5 View Details

Three partners A, B and C form a partnership. Their capital contributions are ₦120,000, ₦180,000 and ₦200,000 respectively. Partner A works full‑time for 48 weeks, B works part‑time for 44 weeks and C works part‑time for 40 weeks during the year. Profits are to be shared in proportion to the product of each partner's capital contribution and the number of weeks he/she is actively involved. The partnership earned a net profit of ₦540,000 for the year. How much profit does partner B receive?

Correct A. 197269

B. 194400

C. 180000

D. 308340

Correct Answer: A

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Question 6 View Details

A shopkeeper buys 120 items at ₦350 each. He adds a markup of 25% on the total cost and then offers a flat discount of ₦500 on the invoice. What amount does the customer finally pay?

Correct A. 52000

B. 51500

C. 52500

D. 53000

Correct Answer: A

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Question 7 View Details

A wholesaler purchases goods whose list price is ₦150,000. He receives a trade discount of 12% and then pays a freight charge equal to 3% of the discounted price plus a handling fee of ₦2,500. He intends to sell the goods to retailers with a profit margin of 20% on his total cost. If he wishes to offer a seasonal discount on the selling price, what is the maximum percentage discount he can give while still maintaining at least a 15% profit margin on his total cost?

A. 5%

Correct B. 4.2%

C. 3.5%

D. 6%

Correct Answer: B

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Question 8 View Details

A small business needs ₦200,000 to purchase inventory. It can obtain finance either (i) a bank loan with 12% per annum interest payable monthly and a processing fee of ₦5,000, or (ii) merchant credit that offers a 10% discount on purchases if paid within 30 days, otherwise 18% per annum simple interest on the outstanding amount with no fee. The business expects to sell the inventory and receive cash after 45 days. Which source of finance results in the lower total cost, and what is that total cost?

A. Bank loan; total cost ≈ ₦5,120

B. Merchant credit; total cost ≈ ₦5,300

Correct C. Merchant credit; total cost ≈ ₦4,438

D. Bank loan; total cost ≈ ₦4,900

Correct Answer: C

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Question 9 View Details

A consumer bought a television advertised as "energy‑saving, 150‑watt consumption per hour" for ₦120,000. After three months (90 days) of use, the average measured consumption is 210 watts. The consumer used the TV for an average of 5 hours per day. Electricity costs ₦45 per kilowatt‑hour. Under the Consumer Protection Act, a consumer is entitled to a full refund if the product deviates by more than 20% from the advertised specification and may also claim actual loss incurred. Determine (a) whether the consumer is entitled to a refund, (b) the excess electricity cost incurred, and (c) the total amount the consumer can claim.

Correct A. Refund entitled; excess electricity cost ₦1,215; total claim ₦121,215

B. Refund entitled; excess electricity cost ₦1,215; total claim ₦120,215

C. Refund entitled; excess electricity cost ₦1,050; total claim ₦121,050

D. Refund not entitled; excess electricity cost ₦1,215; total claim ₦120,000

Correct Answer: A

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Question 10 View Details

A company's share price over the last five trading days was: Day 1 ₦250, Day 2 ₦260, Day 3 ₦255, Day 4 ₦265, Day 5 ₦270. An investor bought 400 shares on Day 2 and 300 shares on Day 4. On Day 5 the company announced a 2‑for‑1 stock split, effective immediately, and the market price adjusted to exactly half of the pre‑split closing price. Calculate (a) the investor's total cost basis before the split, (b) the number of shares held after the split, (c) the market value of the holdings immediately after the split, and (d) the overall percentage gain or loss relative to the original cost basis.

A. Cost basis ₦185,000; shares after split 1,400; market value ₦189,000; gain ≈ 2.2%

B. Cost basis ₦183,500; shares after split 1,200; market value ₦162,000; gain ≈ -11.7%

C. Cost basis ₦183,500; shares after split 1,400; market value ₦196,000; gain ≈ 6.8%

Correct D. Cost basis ₦183,500; shares after split 1,400; market value ₦189,000; gain ≈ 3.0%

Correct Answer: D

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Question 11 View Details

A small business needs to raise ₦500,000. It can obtain a bank loan at 12% per annum, repayable over 5 years with equal annual installments, and it can also raise capital by issuing shares with a nominal value of ₦50 each, paying an annual dividend of 8% of the share capital. The business wants the total annual cash outflow (loan instalment plus dividend) not to exceed ₦80,000. Determine the maximum amount that can be borrowed and the minimum number of shares that must be issued to meet the funding requirement.

A. Bank loan amount: ₦180,000; Number of shares: 5,000

B. Bank loan amount: ₦166,650; Number of shares: 5,000

C. Bank loan amount: ₦150,000; Number of shares: 7,500

Correct D. Bank loan amount: ₦166,650; Number of shares: 6,667

Correct Answer: D

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Question 12 View Details

A wholesaler purchases 800 units of a product. The catalogue price is ₦200 per unit. He receives a trade discount of 10% on the catalogue price. If he pays within 10 days he gets an additional cash discount of 2%; otherwise he pays the trade‑discounted price. He intends to sell each unit at a markup of 25% on his actual cost. He wants a total profit of at least ₦15,000 on the whole batch. Determine (i) whether he must take the cash discount to meet his profit target, and (ii) the selling price per unit he should set.

Correct A. No; the minimum selling price per unit is ₦220.50

B. No; the minimum selling price per unit is ₦210.00

C. Yes; the minimum selling price per unit is ₦215.00

D. Yes; the minimum selling price per unit is ₦220.50

Correct Answer: A

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Question 13 View Details

A company can advertise on three media: TV, radio and newspaper. One 30‑second TV spot costs ₦800,000 and reaches 2,000,000 viewers; one radio ad costs ₦120,000 and reaches 300,000 listeners; one newspaper full‑page ad costs ₦250,000 and reaches 150,000 readers. Because some audiences overlap, the unique reach contributed by each medium is: TV 1,700,000 per spot, radio 294,000 per ad, newspaper 150,000 per ad. The company must achieve a unique reach of at least 10,000,000 people and wants to minimise the total advertising expenditure. Determine the number of TV spots, radio ads and newspaper ads that meet the reach requirement at the lowest possible cost, and state the minimum total cost.

Correct A. 0 TV spots, 35 radio ads, 0 newspaper ads; Minimum total cost = ₦4,200,000

B. 1 TV spot, 30 radio ads, 0 newspaper ads; Minimum total cost = ₦4,400,000

C. 0 TV spots, 34 radio ads, 1 newspaper ad; Minimum total cost = ₦4,330,000

D. 2 TV spots, 20 radio ads, 0 newspaper ads; Minimum total cost = ₦4,000,000

Correct Answer: A

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Question 14 View Details

An investor bought 200 shares of Company X at ₦150 each. During the year the company declared a 10% stock dividend and a cash dividend of ₦5 per share. After the stock dividend the market price per share adjusts proportionally. At year‑end the share price is ₦180. The investor sells 150 shares at the year‑end price. Determine (i) the total cash received from dividends, (ii) the average cost per share after the stock dividend, (iii) the capital gain on the shares sold, and (iv) the overall return on investment, expressed as a percentage (total cash received + market value of remaining shares - initial investment) ÷ initial investment × 100.

A. Cash dividend: ₦1,100; Average cost per share: ₦136.36; Capital gain on sold shares: ₦7,000.00; Overall return: 36.00%

Correct B. Cash dividend: ₦1,100; Average cost per share: ₦136.36; Capital gain on sold shares: ₦6,545.45; Overall return: 35.67%

C. Cash dividend: ₦1,000; Average cost per share: ₦136.36; Capital gain on sold shares: ₦6,545.45; Overall return: 35.33%

D. Cash dividend: ₦1,100; Average cost per share: ₦150.00; Capital gain on sold shares: ₦4,500.00; Overall return: 33.33%

Correct Answer: B

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Question 15 View Details

An importer plans to bring 5,000 units of a gadget. The supplier's invoice is US$8 per unit. The exchange rate is ₦460 per US$. The importer must pay a 5% import duty on the CIF value, a 2% surcharge on the duty, insurance of 0.5% of the CIF value, and a bank commission of 1% on the amount converted. Calculate the total landed cost per unit in Naira. If the importer desires a profit margin of 20% on the landed cost, what selling price per unit should be set?

A. Landed cost per unit: ₦3,924.94; Selling price per unit: ₦4,709.93

B. Landed cost per unit: ₦3,922.88; Selling price per unit: ₦4,658.88

C. Landed cost per unit: ₦3,919.20; Selling price per unit: ₦4,703.04

Correct D. Landed cost per unit: ₦3,922.88; Selling price per unit: ₦4,707.46

Correct Answer: D

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Question 16 View Details

A homeowner buys 3 bags of cement at ₦2,500 each, 5 tiles at ₦1,200 each, and 2 metres of pipe at ₦3,400 per metre. A service charge of 5% is added to the subtotal. What is the total amount payable?

A. 20675

Correct B. 21315

C. 20300

D. 22330

Correct Answer: B

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Question 17 View Details

A retailer purchases 200 units of a product for a total cost of ₦48,000 and incurs a monthly fixed overhead of ₦12,000. He intends to sell each unit with a 25% markup on its cost price. For the first 50 units sold he will give a 10% discount on the selling price. What is the minimum number of units he must sell in the month to achieve a profit of at least ₦15,000 after accounting for the discount on the first 50 units?

A. 246

Correct B. 255

C. 278

D. 250

Correct Answer: B

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Question 18 View Details

A truck travels 120 km at 60 km/h, then 80 km at an unknown speed v km/h, and finally 100 km at 80 km/h. The whole journey takes exactly 5 hours. (a) Find the unknown speed v. (b) If the driver can increase the unknown‑speed segment by 20% without altering the other two segments, what is the time saved, in minutes, compared with the original 5‑hour schedule?

A. 20

Correct B. 17.5

C. 15

D. 22.5

Correct Answer: B

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Question 19 View Details

A consumer buys a washing machine for ₦120,000 with a 2‑year warranty covering defects. After 18 months the machine fails. The consumer can either (A) have the seller repair it at a cost of ₦8,000, which will take 3 months, or (B) return the machine for a refund. The refund amount is reduced by depreciation: the machine loses 20% of its value each year (assume linear depreciation). In addition, the consumer loses ₦5,000 per month of downtime. Which option gives the greater net monetary benefit? Compute the net benefit for each option and state the preferred choice.

A. Repair option is better; net benefit = ₦90,000 versus a loss of ₦10,000 for refund.

B. Refund option is better; net benefit = ₦84,000 versus a loss of ₦25,000 for repair.

Correct C. Refund option is better; net benefit = ₦84,000 versus a loss of ₦23,000 for repair.

D. Refund option is better; net benefit = ₦70,000 versus a loss of ₦30,000 for repair.

Correct Answer: C

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Question 20 View Details

A wholesaler buys 500 units of a product for a total of ₦250,000. He incurs a fixed monthly overhead of ₦10,000. He sells to retailers using the following price schedule: up to 100 units - ₦600 per unit; 101 to 300 units - ₦570 per unit; above 300 units - ₦540 per unit. What is the minimum total number of units he must sell in a month to achieve a profit of at least ₦15,000 after covering the overhead? State the optimal allocation of units among the three price brackets that attains this profit with the fewest units sold.

A. 320 units; allocate 100 units at ₦600, 200 units at ₦570, and 20 units at ₦540.

B. 325 units; allocate 100 units at ₦600, 150 units at ₦570, and 75 units at ₦540.

Correct C. 325 units; allocate 100 units at ₦600, 200 units at ₦570, and 25 units at ₦540.

D. 330 units; allocate 100 units at ₦600, 200 units at ₦570, and 30 units at ₦540.

Correct Answer: C

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Question 21 View Details

An insurance company offers a policy with a sum assured of ₦500,000. The base premium is calculated as a percentage r of the sum assured. The company adds a loading of 20% on the base premium, then gives a 10% early‑payment discount on the loaded premium, and finally applies a 5% policy tax on the discounted amount. If the client pays a total premium of ₦4,600, what is the base premium rate r (in %), correct to two decimal places?

Correct A. 0.81

B. 0.90

C. 0.85

D. 0.75

Correct Answer: A

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Question 22 View Details

An exporter receives US$10,000 and wants to convert it to Naira. The bank's spot rate is ₦750 per US$. The bank charges a commission of x% on the Naira amount after conversion, but if the commission exceeds ₦100,000 it gives a 2% discount on the commission. The exporter finally receives ₦7,350,000. Find the commission rate x (in %), correct to two decimal places.

A. 2.15

Correct B. 2.04

C. 2.30

D. 1.95

Correct Answer: B

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Question 23 View Details

A warehouse has a floor area of 2,000 m². Each pallet occupies 1.5 m² and weighs 500 kg. The maximum load capacity of the floor is 150,000 kg. Handling cost is ₦2,500 per pallet. If the total handling cost before any discount exceeds ₦500,000, the bank gives a 20 % discount on the total handling cost. The monthly rent for the whole warehouse is ₦40,000 (fixed). The manager wants to store as many pallets as possible while keeping the total monthly cost (handling after discount plus rent) not more than ₦500,000. What is the maximum number of pallets that can be stored?

A. 240

B. 225

Correct C. 230

D. 250

Correct Answer: C

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Question 24 View Details

A consignment has a CIF value of ₦2,000,000. Import duty is charged at 5 % of the CIF value. A surcharge of 2 % of the CIF value is also levied. If the duty amount exceeds ₦80,000, a rebate of 10 % on the duty is granted (the rebate is applied before VAT). VAT is charged at 7.5 % on the sum of the CIF value and the net duty (after rebate). Compute the total tax payable (duty after rebate + surcharge + VAT).

A. 297500

B. 276300

C. 287500

Correct D. 286750

Correct Answer: D

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Question 25 View Details

A customer deposits ₦500,000 in a savings account that offers a nominal annual interest rate of 6 % compounded quarterly. A quarterly maintenance fee of ₦2,000 is deducted at the beginning of each quarter. If, after the interest for a quarter, the balance exceeds ₦520,000, a bonus interest of 0.5 % is credited on that quarter's ending balance. Determine the account balance after one year, rounded to the nearest Naira.

Correct A. 524989

B. 522377

C. 524990

D. 523586

Correct Answer: A

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