JAMB Commerce 2009
Questions & Answers

Option C might be selected by calculating profit based solely on the initial purchase price rather than the total investment. The total cost is the sum of the purchase price of sixty thousand and the transportation cost of five thousand, giving sixty-five thousand naira. The profit is found by subtracting this total cost from the selling price of eighty thousand, leaving fifteen thousand naira. Dividing the profit by the total cost and multiplying by one hundred yields twenty-three point eight one percent. Common mistake: Omitting additional expenses like transportation when calculating the total cost price.

A student might choose option A by confusing a cooperative society with a standard commercial enterprise. Consumer cooperatives are formed by members pooling resources to purchase commodities in bulk, thereby bypassing intermediaries and securing affordable goods for their members rather than seeking external profits. Common mistake: Assuming all business-oriented entities exist primarily to generate external corporate profits.

Option C might be picked by confusing sales revenue with the cost of goods sold. The cost of goods sold is determined by subtracting the gross profit from the total sales revenue. Subtracting one hundred thousand from two hundred and fifty thousand gives one hundred and fifty thousand naira. Common mistake: Adding the gross profit to the sales revenue instead of finding the difference.

A student might choose option B by confusing public warehouses with private storage facilities. Public warehouses are commercial storage facilities operated to provide warehousing services to any interested individual or business entity in exchange for a fee. Common mistake: Assuming public warehouses are owned exclusively by the government or restricted to specific private users.

Students might mistakenly choose options like ₦1,240,000 by calculating only the new valuation without subtracting the initial amount, or ₦80,000 through arithmetic errors. To find the net difference, first determine the initial monetary worth by multiplying £2,000 by ₦600, yielding ₦1,200,000. Next, compute the updated valuation by multiplying the same quantity of £2,000 by the altered rate of ₦620, which results in ₦1,240,000. Subtracting the initial revenue from the final figure reveals a net change of ₦40,000. Common mistake: Calculating the final total instead of finding the difference between the initial and final sales figures.

Students might choose high speed delivery, assuming all long-distance trade prioritizes fast transit times. Water transport achieves economic viability through efficient mass transit over extended routes. Dividing operating expenditures across a massive volume of cargo results in a uniquely low cost per unit weight. Common mistake: Confusing the speed of transit with the primary cost-saving benefit of maritime or waterway hauling.

An incorrect choice like ₦93,750 could be picked by mistakenly multiplying the quick ratio by inventory or adding the two figures together. Determining liquid assets requires multiplying the given quick ratio of 0.8 by the current liabilities of ₦75,000. Executing this multiplication yields ₦60,000, making the inventory value extra information not needed for this specific computation. Common mistake: Using the inventory figure within the quick asset formula instead of applying the quick ratio directly to current liabilities.

A student might select 4% by simply subtracting the numbers or 90% by taking the selling price ratio incorrectly. To find the percentage reduction, determine the absolute discount amount by finding the difference between the listed price of ₦40,000 and the actual selling price of ₦36,000, which equals ₦4,000. Divide this resulting discount of ₦4,000 by the original list price of ₦40,000 and multiply by 100 to convert the fraction into a 10% rate. Common mistake: Dividing the discount by the selling price rather than the original list price.

A learner might select 40% by multiplying instead of dividing the principal and time variables. The annual interest rate is computed by taking the total interest earned, which is ₦8,000, and dividing it by the product of the principal investment of ₦50,000 and the 4-year time period. This formula produces a decimal of 0.04, which translates directly to 4 percent per annum. Common mistake: Placing the principal and time values in the numerator instead of the denominator.

Options like ease of formation or retention of all profits might be mistakenly picked because they describe positive attributes of this business structure rather than its drawbacks. Operating a business as a single owner means financing relies completely on personal savings and whatever personal loans can be secured. This heavy reliance on individual resources creates a severe restriction on available capital for expansion. Common mistake: Confusing business advantages with structural disadvantages regarding financial growth.

A student might guess a written promise to pay, which actually describes a promissory note rather than a cheque. A cheque functions as a financial order directed specifically to a bank, instructing it to disburse a designated sum of money from the account drawer to the named payee. Common mistake: Confusing a cheque with a promissory note by ignoring who issues the payment command.

An option like ₦4,896 might be chosen by miscalculating the surcharge or applying it only once annually instead of monthly. First, divide the annual premium of ₦4,800 by 12 months to find a base monthly payment of ₦400. Adding a 2% surcharge to this monthly amount means adding ₦8, bringing each month's cost to ₦408. Multiplying this adjusted monthly installment by 12 gives a total yearly cost of ₦5,856. Common mistake: Applying the percentage surcharge to the total annual premium directly rather than computing it on the monthly installment.

Learners might choose encouraging impulsive buying, assuming all advertising is designed to push immediate sales regardless of consumer knowledge. Informative advertising focuses on delivering factual product details so buyers can evaluate their choices properly. Supplying these specifications and details directly aids informed purchase decisions. Common mistake: Confusing persuasive techniques aimed at impulse buying with educational advertisements.

A student might select ₦80,000 by multiplying the liabilities by the debt-to-equity ratio instead of dividing. Finding the owner's equity requires taking the total liabilities of ₦200,000 and dividing them by the debt-to-equity ratio of 0.4. Performing this division yields an equity figure of ₦500,000. Common mistake: Multiplying liabilities by the ratio instead of isolating equity through division.

Planning or leading might be chosen by a student confusing the initial goal-setting phase with the operational review phase. Controlling specifically tracks ongoing performance metrics and implements necessary corrective actions to ensure organizational goals are successfully met. Common mistake: Mixing up planning, which looks forward, with controlling, which monitors and corrects actual performance.

A candidate might select ₦126 by subtracting the markup percentage instead of adding it, or ₦54 by stopping at the markup value itself. Calculate the cash value of the markup by finding 30 percent of the ₦180 cost, which equals ₦54. Add this monetary markup of ₦54 to the original cost of ₦180 to arrive at the final selling price of ₦234. Common mistake: Forgetting to add the calculated markup back to the original cost to find the final price.

Effective marketing or strong management might be mistakenly selected if a student misreads the question as asking for success factors rather than failure causes. Inadequate budgeting and poor handling of cash flow represent typical flaws that cause small businesses to collapse. Poor financial management routinely cuts off survival regardless of product quality. Common mistake: Selecting positive business attributes instead of operational weaknesses.

A student might choose ₦400,000 by adding costs together or ₦100,000 through incorrect subtraction. First, establish the gross profit by subtracting the cost of goods sold of ₦250,000 from total sales of ₦600,000, leaving ₦350,000. Next, subtract the operating profit of ₦150,000 from this gross profit to isolate the operating expenses of ₦200,000. Common mistake: Subtracting operating profit directly from sales instead of using gross profit as an intermediary step.

Controlling exchange rates might be picked because fiscal policy involves government finances, which people often confuse with monetary policy or foreign exchange management. Fiscal policy relies specifically on government spending adjustments and taxation levels to steer aggregate demand and stabilize the overall economy. Common mistake: Confusing fiscal policy tools with monetary policies handled by central banks.

A simple interest calculation yielding ₦580 might be incorrectly chosen by ignoring the compound nature of inflation over multiple periods. Compute the compound future cost by multiplying the initial ₦500 price by 1.08 raised to the power of 2. Calculating ₦500 multiplied by 1.1664 gives an updated cost of ₦583.20. Common mistake: Treating inflation as simple interest rather than applying compound growth over successive years.