A retailer sells an item for N280, making a profit of 30% on the cost price. Calculate the cost price of the item.
Let cost price = C. Selling price = C + 0.3C = 1.3C. Given 1.3C = N280, C = N280 / 1.3 = N215.38.
Which of the following insurance principles prevents the insured from making a profit from a loss?
The principle of indemnity ensures the insured is compensated only for the actual loss, preventing profit from a loss.
A company purchases goods worth N200,000 and receives a trade discount of 10%. If a further cash discount of 2% is offered for payment within 10 days, calculate the amount paid with the cash discount.
Trade discount = 10% of N200,000 = N20,000. Price after trade discount = N200,000 - N20,000 = N180,000. Cash discount = 2% of N180,000 = N3,600. Amount paid = N180,000 - N3,600 = N176,400.
Which of the following is a primary objective of a development finance institution?
Development finance institutions provide financial support for economic and social development projects, such as infrastructure and poverty reduction.
An importer buys goods worth $5,000 at an exchange rate of N500/$1. If the Naira depreciates by 4% by the time of payment, calculate the new cost in Naira.
Original cost = $5,000 × N500 = N2,500,000. New exchange rate after 4% depreciation = N500 × 1.04 = N520. New cost = $5,000 × N520 = N2,600,000.
Which of the following is a characteristic of a bonded warehouse?
A bonded warehouse stores goods duty-free until customs duties are paid, allowing importers to defer tax payments.
A company has current assets of N200,000, including inventory of N50,000, and current liabilities of N100,000. Calculate the quick ratio.
Quick assets = Current assets - Inventory = N200,000 - N50,000 = N150,000. Quick ratio = Quick assets / Current liabilities = N150,000 / N100,000 = 1.5:1.
A consignment of goods is transported by rail over a distance of 500 km at a cost of N5 per tonne-km. If the consignment weighs 20 tonnes, what is the total transportation cost?
Total distance = 500 km, weight = 20 tonnes, cost = N5 per tonne-km. Total cost = 500 × 20 × N5 = N50,000.
An investor deposits N25,000 in a fixed deposit account earning compound interest at a rate of 10% per annum. What will be the total amount after 3 years?
Compound interest formula: A = P(1 + r/n)^(nt). P = N25,000, r = 0.1, n = 1, t = 3. A = N25,000 × (1.1)^3 = N25,000 × 1.331 = N33,275.
Which of the following is the most significant disadvantage of a public corporation?
Public corporations often face political interference, hindering efficient management and decision-making.
A holder of a bill of exchange endorses it to another party. This action:
Endorsing a bill of exchange transfers the right to receive payment to the endorsee, making them the new payee.
An insurance policy has a sum insured of N100,000 and a deductible of N5,000. If a loss of N80,000 occurs, how much will the insurer pay?
Claimable amount = Loss - Deductible = N80,000 - N5,000 = N75,000. The insurer pays N75,000, as it is within the sum insured.
Which of the following is an unethical marketing practice?
Subliminal advertising manipulates consumers unconsciously, violating ethical marketing standards.
A company has total assets of N800,000 and a debt-to-equity ratio of 0.5:1. Calculate the total liabilities.
Debt-to-equity ratio = Liabilities / Equity = 0.5. Total assets = Liabilities + Equity = N800,000. Let Liabilities = L, Equity = 2L. Then, L + 2L = N800,000, 3L = N800,000, L = N266,667.
Which management principle emphasizes a clear chain of command from the top to the bottom of the organization?
The scalar chain principle emphasizes a clear chain of command for effective communication and authority.
A company imports 200 units of a product valued at N10,000 per unit. If a tariff of 10% ad valorem is applied, calculate the total tariff payable.
Total value = 200 × N10,000 = N2,000,000. Ad valorem tariff = 10% of N2,000,000 = N200,000.
Which of the following is a major challenge for small businesses in a highly competitive market?
Small businesses face limited resources and bargaining power, making competition with larger firms difficult.
A company has sales of N750,000, cost of goods sold of N300,000, operating expenses of N180,000, and interest revenue of N10,000. Calculate the net profit before tax.
Gross profit = Sales - Cost of goods sold = N750,000 - N300,000 = N450,000. Net profit before tax = Gross profit - Operating expenses + Interest revenue = N450,000 - N180,000 + N10,000 = N280,000.
Which of the following is a tool used by the central bank to influence interest rates?
The central bank adjusts the discount rate to influence interest rates, affecting borrowing costs and money supply.
If the Consumer Price Index (CPI) increases from 150 to 165 over a year, what is the percentage rate of inflation?
Inflation rate = [(New CPI - Old CPI) / Old CPI] × 100 = [(165 - 150) / 150] × 100 = (15 / 150) × 100 = 10%.
Which of the following is a potential disadvantage of international trade for domestic industries?
International trade can increase competition, leading to job losses in domestic industries unable to compete.
A business has an opening stock of N100,000, purchases of N300,000, and cost of goods sold of N320,000. Calculate the closing stock.
Closing stock = Opening stock + Purchases - Cost of goods sold = N100,000 + N300,000 - N320,000 = N80,000.
Which of the following is a key principle of sustainable development?
Sustainable development balances economic, social, and environmental considerations for present and future needs.
Which of the following actions demonstrates a consumer exercising their right to redress?
Exercising the right to redress involves seeking resolution for issues like faulty products through advocacy groups.
In which market structure do firms typically engage in non-price competition?
Monopolistic competition involves non-price competition, like advertising, to differentiate products.
A company conducts a market survey and finds that 60% of 500 respondents are aware of their brand. Of those aware, 70% have tried the product. How many respondents have tried the product?
Brand-aware respondents = 60% of 500 = 0.6 × 500 = 300. Tried product = 70% of 300 = 0.7 × 300 = 210.
Which of the following is a key objective of sales promotion?
Sales promotion stimulates immediate sales through short-term incentives like discounts.
A product costs N150 to produce. If a retailer applies a markup of 40% on the selling price, what is the selling price?
Let selling price = S. Markup = 0.4S. Cost price = S - 0.4S = 0.6S. Given cost price = N150, 0.6S = N150, S = N150 / 0.6 = N250.
A warehouse has an opening inventory of 1,200 units. During the month, 3,500 units are received, and 2,800 units are issued. What is the closing inventory?
Closing inventory = Opening inventory + Receipts - Issues = 1,200 + 3,500 - 2,800 = 1,900 units.
Which of the following is a major limitation of pipeline transportation?
Pipeline transportation is limited to specific goods like oil and gas, reducing its versatility.
A company issues 2,500 ordinary shares at a premium of N15 per share. If the par value is N50, what is the total amount raised from the share issue?
Issue price per share = Par value + Premium = N50 + N15 = N65. Total amount raised = 2,500 × N65 = N162,500.
Which of the following is a key difference between a bill of exchange and a promissory note?
A bill of exchange requires acceptance by the drawee, while a promissory note is a direct promise to pay, not requiring acceptance.
An insurance policy has a deductible of N10,000 and covers a loss of N60,000. If the actual loss incurred is N75,000, how much will the insurer pay?
Claimable = N75,000 - N10,000 = N65,000, but capped at policy limit of N60,000.
Which of the following is a key objective of public relations?
Public relations manages and enhances an organization’s reputation through strategic communication.
A business has total fixed costs of N50,000 and a variable cost per unit of N80. If it produces 1,000 units, what is the total cost?
Total cost = Fixed costs + (Variable cost per unit × Units) = N50,000 + (N80 × 1,000) = N50,000 + N80,000 = N130,000.
Which of the following is a key advantage of e-commerce for retailers?
E-commerce allows retailers to reach a global customer base, expanding market opportunities beyond physical locations.
A business has fixed costs of N60,000, a selling price per unit of N200, and variable costs per unit of N120. What is the break-even point in units?
Contribution margin per unit = Selling price - Variable cost = N200 - N120 = N80. Break-even point = Fixed costs / Contribution margin = N60,000 / N80 = 750 units.
Which of the following is a key feature of a cooperative society?
Cooperative societies feature democratic control, with members having equal voting rights regardless of investment.
Which of the following is a component of a country’s balance of payments?
The balance of payments includes the capital account, which records capital transfers and investments.
Which of the following is a benefit of corporate social responsibility for a business?
Corporate social responsibility enhances brand reputation and customer trust by demonstrating ethical and social commitment.
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