waec model questions vol1 2023 commerce | Essay

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Question 1 View Details
Commerce is a fundamental activity that links producers and consumers in an economy.
Question Parts
(a)
Define commerce and list its three main components. Briefly describe each component.
(b)
Discuss how commerce contributes to economic development in a developing country, giving two specific ways.
(c)
Evaluate one advantage and one disadvantage of the rapid growth of e‑commerce for small retailers in Nigeria.
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Question 2 View Details
Nigeria engages in both intra‑regional and international trade. The table below shows the value of its trade for the most recent fiscal year.
Question Parts
(a)
Calculate Nigeria's trade balance for the year and interpret the result.
(b)
Explain two macro‑economic factors that can cause a widening trade deficit.
(c)
The Central Bank is considering a policy to depreciate the naira by 10 %. Discuss, with reference to the price elasticity of demand for imports (‑0.6), how this depreciation is expected to affect the trade balance.
(d)
Suggest one non‑tariff measure that could be used to promote export growth and justify its likely effectiveness.
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Question 3 View Details
A small retail shop sells two products, A and B. The shop incurs fixed costs of ₦120,000 per month. The selling price and variable cost per unit for each product are: - Product A: selling price ₦5,000; variable cost ₦3,200 per unit. - Product B: selling price ₦7,500; variable cost ₦5,400 per unit. The owner wishes to determine the sales volume needed to achieve a target profit of ₦150,000 and to explore ways of increasing profit without altering selling prices.
Question Parts
(a)
Calculate the contribution margin per unit for Product A and for Product B.
(b)
If the shop decides to sell only Product A, how many units of Product A must be sold in a month to earn a profit of ₦150,000?
(c)
The owner now plans to sell a mix of the two products such that 60 % of the total units sold are Product A and 40 % are Product B. Determine the total number of units (rounded up to the nearest whole unit) that must be sold to achieve the same target profit of ₦150,000. Also state the approximate number of units of each product required.
(d)
Discuss two non‑price strategies the retailer could adopt to increase profit without changing the selling prices of the products.
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Question 4 View Details
A Nigerian exporter supplies 10,000 kg of cocoa to a European buyer at a contract price of $2 per kilogram. The prevailing exchange rate at the time of contract signing is ₦460 per US dollar. Three months later, the naira is devalued to ₦520 per US dollar. The export is subject to a 5 % export duty (levied on the naira value of the revenue) and a freight charge equal to 10 % of the contract value in dollars. Using the information above, determine the exporter’s net foreign‑exchange earnings in naira under the original exchange rate and after the devaluation. Also calculate the percentage change in net earnings caused by the devaluation. Finally, discuss two advantages and two disadvantages of a currency devaluation for Nigerian exporters.
Question Parts
(a)
Calculate the gross revenue in dollars and convert it to naira using the original exchange rate (₦460/$).
(b)
Determine the total export duty (in naira) and the freight cost (in naira) using the original exchange rate, then compute the net earnings in naira.
(c)
Repeat the calculations in parts (a) and (b) using the devalued exchange rate (₦520/$) and state the new net earnings in naira.
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Question 5 View Details
A retail shop sells a single type of T‑shirt. The cost price per T‑shirt is ₦2,500. The shop applies a markup of 40 % on the cost price to set its list price. A seasonal discount of 10 % is offered on the list price. The shop’s fixed monthly overheads amount to ₦150,000 and the variable overhead per unit sold (packaging, tags, etc.) is ₦200.
Question Parts
(a)
Calculate the list price of one T‑shirt before discount.
(b)
Determine the selling price after the 10 % discount is applied.
(c)
Find the contribution margin per T‑shirt (selling price minus total variable cost).
(d)
Calculate the minimum number of T‑shirts that must be sold in a month to cover the fixed overheads (break‑even quantity).
(e)
Briefly evaluate whether offering the 10 % discount is advisable for the shop, considering the break‑even result.
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Question 6 View Details
A wholesaler purchases 500 units of a product at ₦1,200 each. Freight and handling cost ₦30 per unit. The wholesaler adds a markup of 25 % on the total cost per unit to set its list price. A trade discount of 5 % is offered to retailers who pay within 30 days; otherwise the full list price is payable in 60 days. Fixed monthly operating expenses are ₦80,000.
Question Parts
(a)
Determine the total cost per unit (purchase price plus freight and handling).
(b)
Calculate the list price per unit after applying the 25 % markup.
(c)
Find the cash price per unit after the 5 % trade discount.
(d)
Compute the contribution margin per unit using the cash price.
(e)
Determine the break‑even quantity of units the wholesaler must sell each month.
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Question 7 View Details
Four friends – Ada, Bayo, Chidi and Damilola – intend to start a business manufacturing eco‑friendly bags. They are evaluating different forms of business organization available in Nigeria.
Question Parts
(a)
Identify and briefly describe three possible forms of business organization they could adopt in Nigeria, highlighting the key legal characteristics of each.
(b)
Assuming they want to limit personal liability and have the ability to raise capital from the public, which form would be most suitable? Justify with at least two reasons.
(c)
If they choose a partnership, explain how profit sharing could be arranged if Ada contributes 40% of capital, Bayo 30%, Chidi 20% and Damilola 10%, but Bayo also brings managerial expertise valued at ₦200,000. Propose a fair profit‑sharing ratio and show the calculation.
(d)
Discuss two major challenges that the chosen form of organization (from part b) might face in the Nigerian business environment, and suggest one mitigation strategy for each.
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Question 8 View Details
XYZ Ltd, a medium‑scale manufacturing firm, plans to expand its production capacity by purchasing new machinery costing ₦15,000,000. Management is evaluating three financing options:
Question Parts
(a)
For each option, calculate the total cash outflow over the 5‑year period (ignore tax effects). Show all workings.
(b)
Compute the effective annual cost of financing for the bank loan and the lease option (use simple interest for the loan and treat lease payments as an annuity; calculate the annualised cost as total outflow divided by the principal amount). Compare which is cheaper.
(c)
Considering the impact on the company’s capital structure and control, discuss the advantages and disadvantages of the share issue compared to the bank loan.
(d)
Based on your calculations and discussion, recommend the most appropriate financing option for XYZ Ltd and justify your recommendation with at least two reasons.
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