Practice waec model questions vol1 commerce 2025 Past Questions

Question 1 View Details

A partnership consists of three partners A, B and C. At the beginning of the year they invest capital of ₦120,000, ₦80,000 and ₦100,000 respectively. After six months, partner B withdraws ₦30,000 of his capital and does not replace it for the remainder of the year. The profit for the year is ₦84,000 and is shared in proportion to the time‑weighted capital (capital amount multiplied by the number of months it was actually invested). What amount of profit does partner B receive?

A. ₦18,000

B. ₦20,000

C. ₦19,500

Correct D. ₦19,158

Correct Answer: D

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Question 2 View Details

A home‑based bakery sells cupcakes. Fixed costs per month are ₦45,000 and the variable cost per cupcake is ₦250. The bakery charges ₦500 per cupcake, but for orders of 200 cupcakes or more it offers a bulk discount reducing the selling price to ₦460 per cupcake. What is the minimum number of cupcakes that must be sold in a month to achieve a profit of at least ₦30,000?

A. 400 cupcakes

B. 360 cupcakes

Correct C. 358 cupcakes

D. 350 cupcakes

Correct Answer: C

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Question 3 View Details

A consumer bought a washing machine for ₦120,000 with a 2‑year manufacturer's warranty covering defects. After 18 months the machine developed a fault. The seller offers two remedies: (i) repair the machine at a cost of ₦12,000, or (ii) replace it with a new model of the same type, but the new model's price has risen by 8% due to inflation. The machine's market value depreciates linearly to 40% of its original price after 2 years. Assuming the consumer can sell the faulty machine at its current market value, which option results in the lower total out‑of‑pocket expense after accounting for the resale value, and what is that net expense?

A. Replace; net expense = ₦63,600

B. Repair; net expense = -₦48,000 (i.e., a saving of ₦48,000)

C. Replace; net expense = -₦5,000 (i.e., a saving of ₦5,000)

Correct D. Repair; net expense = -₦54,000 (i.e., a saving of ₦54,000)

Correct Answer: D

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Question 4 View Details

An investor bought shares of XYZ Ltd on the Nigerian Stock Exchange over three days: - Day 1: 200 shares at ₦150 each, brokerage 0.5% of the transaction value. - Day 2: 150 shares at ₦165 each, brokerage 0.5%. - Day 3: 250 shares at ₦158 each, brokerage 0.5%. Later the investor sold 400 shares at ₦170 each, paying a selling brokerage of 0.5% and a capital gains tax of 10% on the profit (profit before tax). What is the investor's net profit after all charges?

A. ₦4,200.75

B. ₦3,950.00

C. ₦3,800.50

Correct D. ₦4,061.25

Correct Answer: D

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Question 5 View Details

A transport company runs a bus service. Fixed operating cost per day is ₦18,000 and the variable cost per passenger is ₦120. The regular ticket price is ₦250 per passenger, but for any group of five or more passengers travelling together the company gives a 10% discount on each ticket for that group. On a particular day the bus carried 48 passengers, consisting of six groups of five passengers each and the remaining passengers travelling individually. What total profit (or loss) did the company make that day?

Correct A. -₦12,510 (loss)

B. -₦13,800 (loss)

C. -₦10,500 (loss)

D. ₦1,200 (profit)

Correct Answer: A

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Question 6 View Details

Three partners A, B and C invest capital of N200,000, N150,000 and N100,000 respectively in a partnership. The partnership agreement states that each partner receives interest on his capital at 8% per annum, and the remaining profit (after interest) is shared in proportion to the capital contributed. If the net profit before interest for the year is N126,000, determine the amount each partner receives at the end of the year.

A. A: N56,000; B: N40,000; C: N30,000

B. A: N58,000; B: N39,000; C: N28,000

C. A: N54,000; B: N42,000; C: N30,000

Correct D. A: N56,000; B: N42,000; C: N28,000

Correct Answer: D

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Question 7 View Details

A mobile telephone plan charges a connection fee of N150 per call. The per‑minute rate is N45 for the first 10 minutes and N35 for each additional minute. If a call lasts more than 20 minutes, a 10% discount is given on the total per‑minute charges (the connection fee is not discounted). After the discount, a Value Added Tax of 7.5% is applied to the whole bill. Calculate the amount payable for a call that lasted 27 minutes.

Correct A. N1,172.29

B. N1,284.13

C. N1,155.56

D. N1,090.50

Correct Answer: A

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Question 8 View Details

An importer buys 5,000 kg of cocoa beans at a foreign price of $2.20 per kg. The shipment is subject to a 5% import duty, a surcharge of 2% on the duty amount, and a handling fee of 0.5% on the total CIF value. The exchange rate at the time of purchase is ₦415 per $. After the shipment arrives, the naira is devalued by 6% against the dollar. Assuming the duties, surcharge and handling fee are payable in naira at the new exchange rate, calculate the total amount in naira that the importer must pay.

A. ₦5,201,818

B. ₦4,820,640

C. ₦5,105,040

Correct D. ₦5,109,878

Correct Answer: D

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Question 9 View Details

A motor insurance policy has a base premium of N120,000. For high‑risk drivers a loading factor of 15% is added, followed by an administrative charge of 5% on the loaded premium. A policyholder tax of 2% is then applied on the sum of the loaded premium and the administrative charge. (a) Compute the final premium payable by a high‑risk driver. (b) If the probability of a claim in the year is 0.08 and the average claim cost is N250,000, determine the insurer's expected profit for this policy (assume the insurer's only cost is the expected claim payout).

A. Final premium: N146,880; Expected profit: N126,880

Correct B. Final premium: N147,798; Expected profit: N127,798

C. Final premium: N147,300; Expected profit: N127,300

D. Final premium: N147,660; Expected profit: N127,660

Correct Answer: B

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Question 10 View Details

A wholesaler purchases a product at a unit cost of N2,500. Fixed overheads for the month amount to N800,000. The wholesaler normally sells at a 30% markup on cost. However, for any units sold beyond 800 units in a month, a volume discount of 5% is given on the selling price for those excess units. Determine the minimum number of units that must be sold in the month for the wholesaler to break even.

Correct A. 1,141 units

B. 1,050 units

C. 1,300 units

D. 1,200 units

Correct Answer: A

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Question 11 View Details

Bank A offers a loan of ₦500,000 repayable in 3 years with a nominal annual interest rate of 12% compounded semi‑annually and charges an upfront processing fee of 2% of the loan amount. Bank B offers the same loan with an effective annual interest rate of 11% and no processing fee. Which bank provides the lower total cost to the borrower?

Correct A. Bank B

B. Neither bank; consider a third option

C. Bank A

D. Both banks have equal total cost

Correct Answer: A

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Question 12 View Details

A consumer purchases a television for ₦150,000. The seller provides a 2‑year warranty covering repair costs up to ₦30,000. An optional extended warranty for an additional ₦12,000 covers any repair cost for the next 3 years. Historical data shows a 0.25 probability of a repair claim in the first 2 years with an average cost of ₦20,000, and a 0.15 probability of a claim in years 3‑5 with an average cost of ₦25,000. Assuming at most one claim per period and independence, should the consumer buy the extended warranty to minimise expected total cost?

A. Delay purchase until after the first claim

Correct B. Do not purchase the extended warranty

C. Purchase only the standard warranty

D. Purchase the extended warranty

Correct Answer: B

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Question 13 View Details

A country exported goods worth $45 million and imported goods worth $38 million. If the government imposes a 5% tariff on all imports, what is the new trade balance (exports minus imports after tariff)?

Correct A. $5.1 million surplus

B. $5.0 million surplus

C. $5.1 million deficit

D. $5.2 million surplus

Correct Answer: A

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Question 14 View Details

An advertising agency plans a TV campaign. A 30‑second spot costs ₦250,000. The target audience size is 2 million viewers. The agency wants to achieve a Gross Rating Point (GRP) of 120. One GRP equals 1% of the target audience reached once, and each airing of the spot reaches 1.2% of the audience (allowing for overlap). How many times must the spot be aired to meet the GRP target, and what is the total cost if a 10% discount on the spot price applies after the 5th airing?

Correct A. 100 airings, total cost ₦22,625,000

B. 120 airings, total cost ₦27,125,000

C. 100 airings, total cost ₦22,750,000

D. 100 airings, total cost ₦25,000,000

Correct Answer: A

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Question 15 View Details

Three partners A, B and C start a partnership with capital contributions of ₦120,000, ₦180,000 and ₦200,000 respectively. The partnership agreement states that profit will be shared in proportion to capital contributions after first paying a 5% interest on each partner's capital for the year. At the end of the year the partnership earned a net profit of ₦150,000 before interest. How much profit does each partner receive after interest is paid?

Correct A. A: ₦30,000; B: ₦45,000; C: ₦50,000

B. A: ₦41,667; B: ₦41,667; C: ₦41,667

C. A: ₦34,200; B: ₦51,300; C: ₦57,000

D. A: ₦36,000; B: ₦54,000; C: ₦60,000

Correct Answer: A

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Question 16 View Details

A retailer purchases 500 units of a product at ₦2,200 each. He intends to sell the units at a marked price (MP) per unit and offer a 12% trade discount on MP to customers who buy more than 200 units. He also pays a sales commission of 5% on the amount received after the discount. The retailer wants to earn a total profit of ₦1,800,000 from the whole batch. Assuming all 500 units will be sold with the discount applied, what should be the marked price per unit (in naira) so that the profit target is met?

A. 7200

B. 7100

Correct C. 6938

D. 6800

Correct Answer: C

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Question 17 View Details

A family buys a refrigerator for ₦210,000. They sell it to a neighbour, adding a profit of 15% on the cost price and also charging a flat delivery fee of ₦5,000. What total amount does the neighbour pay?

Correct A. 246500

B. 242500

C. 247000

D. 250000

Correct Answer: A

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Question 18 View Details

A shopkeeper sells a batch of 120 shirts and collects a total revenue of ₦720,000. What is the average selling price per shirt?

Correct A. 6000

B. 8000

C. 7200

D. 5000

Correct Answer: A

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Question 19 View Details

A company's shares pay an annual dividend of ₦2.50 per share. A 10% withholding tax is deducted at source. An investor wants a net dividend yield of at least 5% and also wants the price‑earnings (P/E) ratio to be no more than 12. The company's earnings per share (EPS) for the last year were ₦5.20. What is the maximum price per share the investor should be willing to pay?

Correct A. 45

B. 40

C. 50

D. 55

Correct Answer: A

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Question 20 View Details

A small manufacturing firm needs ₦12,000,000 for expansion. It can raise the amount either by a bank loan at 12% simple interest per annum or by issuing 10,000 new ordinary shares with a nominal value of ₦1,000 each, selling each at ₦1,200 and paying an annual dividend of 8% on the nominal value. Which source of finance should the firm choose if it wants the lower annual cost, and what is that annual cost (in naira)?

A. 960000

Correct B. 800000

C. 720000

D. 1440000

Correct Answer: B

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Question 21 View Details

A trader buys 200 units of a product at ₦500 each. He pays a flat transport fee of ₦10,000 and a sales tax of 5% on the total purchase cost (excluding transport). After selling all units he makes a profit of ₦30,000. What is the selling price per unit in naira?

A. ₦700

Correct B. ₦725

C. ₦750

D. ₦680

Correct Answer: B

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Question 22 View Details

A manufacturing firm needs ₦5,000,000 for new equipment. It plans to raise the funds from three sources: a bank loan (interest 12% p.a.), 10% debentures with a flotation cost of 2% of the amount raised, and retained earnings (cost 8%). The firm will obtain 40% of the total from the bank loan, 35% from debentures and the remainder from retained earnings. What is the overall weighted average cost of finance (WACC) for the project, expressed as a percentage to two decimal places?

Correct A. 10.37%

B. 10.00%

C. 11.20%

D. 9.85%

Correct Answer: A

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Question 23 View Details

A trader obtains a discount loan of ₦2,000,000 at a bank discount rate of 15% per annum for 90 days. The bank deducts the discount from the principal and pays the net amount to the trader. What is the effective annual interest rate (to two decimal places) of this loan?

A. 15.00%

B. 14.85%

Correct C. 15.58%

D. 16.20%

Correct Answer: C

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Question 24 View Details

A Nigerian exporter sells goods worth $10,000. The exchange rate at the time of sale is ₦410 per $. If the exchange rate later changes to ₦420 per $, what is the difference in naira revenue that the exporter would have earned by converting the dollars at the new rate?

Correct A. ₦100,000

B. ₦110,000

C. ₦95,000

D. ₦90,000

Correct Answer: A

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Question 25 View Details

A company runs an advertising campaign using TV and radio. Survey data shows that 60% of the target market watches TV, 45% listens to radio, and 25% does both. The company reaches 80% of the TV audience and 70% of the radio audience. What percentage of the total target market is reached by at least one of the two media?

Correct A. 56%

B. 48%

C. 31.5%

D. 65.5%

Correct Answer: A

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