A retailer purchases goods for ₦80,000 with a trade discount of 10%. If operating expenses are ₦12,000 and the goods are sold for ₦100,000, calculate the net profit.
Trade discount = 10% of ₦80,000 = ₦8,000. Cost price = ₦80,000 - ₦8,000 = ₦72,000. Gross profit = Selling price - Cost price = ₦100,000 - ₦72,000 = ₦28,000. Net profit = Gross profit - Operating expenses = ₦28,000 - ₦12,000 = ₦20,000.
Which best describes the principle of uberrimae fidei in insurance?
Uberrimae fidei (utmost good faith) requires both the insurer and insured to disclose all material facts fully and honestly for a fair contract.
A company has an opening stock of ₦35,000, purchases of ₦115,000, and closing stock of ₦45,000. Calculate the cost of goods sold.
Cost of goods sold = Opening stock + Purchases - Closing stock = ₦35,000 + ₦115,000 - ₦45,000 = ₦105,000.
What is a key function of a development bank?
Development banks finance long-term projects, like infrastructure, to promote economic development, unlike commercial banks focusing on short-term loans.
An importer buys goods worth $5,000 at ₦450/$1. If the rate changes to ₦465/$1 at payment, calculate the increase in Naira cost.
Original cost = $5,000 × ₦450 = ₦2,250,000. New cost = $5,000 × ₦465 = ₦2,325,000. Increase = ₦2,325,000 - ₦2,250,000 = ₦75,000.
Which is NOT a specialized warehouse type?
General merchandise warehouses store a wide range of goods, unlike specialized cold storage, bonded, or automated warehouses.
A business has a current ratio of 1.5:1 and current liabilities of ₦60,000. Calculate the current assets.
Current ratio = Current assets / Current liabilities. Current assets = 1.5 × ₦60,000 = ₦90,000.
Pipelines are most suitable for transporting:
Pipelines efficiently transport liquid and gaseous commodities, like oil and gas, over long distances.
A fixed deposit of ₦20,000 earns 8% compound interest per annum. Calculate the total amount after 2 years.
A = P(1 + r/n)^(nt). P = ₦20,000, r = 0.08, n = 1, t = 2. A = ₦20,000 × (1.08)^2 = ₦20,000 × 1.1664 = ₦23,328.
What distinguishes a private limited company from a public limited company?
Private limited companies restrict share transfers, unlike public limited companies, which allow free transfer and public offerings.
A promissory note represents a:
A promissory note is a written promise to pay a specific sum to the payee at a future date, used in credit transactions.
An insurance premium of ₦3,600 is paid in two half-yearly installments with a 5% surcharge per installment. Calculate the cost of each installment.
Half-yearly premium = ₦3,600 / 2 = ₦1,800. Surcharge = 5% of ₦1,800 = ₦90. Cost per installment = ₦1,800 + ₦90 = ₦1,890.
What is an ethical concern with aggressive advertising?
Aggressive advertising that misleads consumers is unethical, violating fair marketing practices.
A business has total assets of ₦750,000 and a debt-to-equity ratio of 0.5:1. Calculate the owner's equity.
Let Equity = E, Liabilities = 0.5E. Total assets = 0.5E + E = ₦750,000. 1.5E = ₦750,000 → E = ₦500,000.
Which management function involves establishing organizational structure and allocating resources?
Organizing defines roles, structures, and allocates resources to achieve goals.
A retailer sells an item for ₦200, with a 25% gross profit on selling price. Calculate the cost price.
Gross profit = 0.25 × ₦200 = ₦50. Cost price = ₦200 - ₦50 = ₦150.
What is a significant challenge for new entrepreneurs?
New entrepreneurs face intense competition and market uncertainty, hindering market entry.
A company has revenue of ₦500,000, cost of goods sold of ₦200,000, operating expenses of ₦100,000, and interest expense of ₦20,000. Calculate profit before tax.
Gross profit = ₦500,000 - ₦200,000 = ₦300,000. Operating profit = ₦300,000 - ₦100,000 = ₦200,000. Profit before tax = ₦200,000 - ₦20,000 = ₦180,000.
What tool does the central bank use to control money supply?
Adjusting reserve requirements is a monetary policy tool to control money supply.
If the CPI increases from 120 to 126, what is the inflation rate?
Inflation rate = [(126 - 120) / 120] × 100 = (6 / 120) × 100 = 5%.
What is a common argument for trade protectionism?
Protectionism protects infant industries, allowing development before foreign competition.
A 15% ad valorem tariff is imposed on electronics worth ₦2,000,000. Calculate the tariff amount.
Tariff = 0.15 × ₦2,000,000 = ₦300,000.
A business has an opening stock of ₦60,000 and a closing stock 20% higher. Calculate the closing stock.
Closing stock = ₦60,000 × 1.2 = ₦72,000.
What is a key principle of ethical marketing?
Ethical marketing emphasizes transparency and honesty, ensuring informed consumers.
Which action by a seller violates consumer rights?
Selling substandard goods without disclosure violates consumer rights to safety and information.
In a monopolistically competitive market, products are:
Monopolistic competition involves differentiated products that are close substitutes, competing on quality and branding.
A business sells 350 units, with total cost ₦14,000 and revenue ₦21,000. Calculate profit per unit.
Profit = ₦21,000 - ₦14,000 = ₦7,000. Profit per unit = ₦7,000 / 350 = ₦20.
What is a limitation of primary market research?
Primary research is time-consuming and costly, involving original data collection.
A product costs ₦180 to produce, with a 30% markup. Calculate the selling price.
Markup = 0.3 × ₦180 = ₦54. Selling price = ₦180 + ₦54 = ₦234.
Calculate the quick ratio with current assets of ₦100,000 (including ₦30,000 inventory) and current liabilities of ₦50,000.
Quick assets = ₦100,000 - ₦30,000 = ₦70,000. Quick ratio = ₦70,000 / ₦50,000 = 1.4:1.
What is a disadvantage of rail transport for goods?
Rail requires specialized infrastructure, limiting flexibility compared to road transport.
A company issues 5,000 preference shares at ₦20 each with an 8% dividend. Calculate the annual dividend payout.
Total value = 5,000 × ₦20 = ₦100,000. Dividend = 0.08 × ₦100,000 = ₦8,000.
What is a key characteristic of a bill of lading?
A bill of lading is a receipt for shipped goods, a contract, and a document of title.
An e-commerce platform has ₦2,500,000 monthly sales with a 12% net profit margin. Calculate the monthly net profit.
Net profit = 0.12 × ₦2,500,000 = ₦300,000.
What is a key element of a successful public relations strategy?
Public relations focuses on positive stakeholder relationships to enhance reputation.
A business imports $10,000 worth of goods at ₦700/$1, with 5% customs duty and ₦200,000 shipping costs. Calculate the total cost in Naira.
Base cost = $10,000 × ₦700 = ₦7,000,000. Duty = 0.05 × ₦7,000,000 = ₦350,000. Total = ₦7,000,000 + ₦350,000 + ₦200,000 = ₦7,550,000.
What is a key aspect of the controlling function of management?
Controlling measures performance against standards to ensure goal achievement.
A business has a cost of goods sold of ₦150,000 and a 40% gross profit margin. Calculate the net sales revenue.
Let Sales = S. 0.4S = S - ₦150,000 → 0.6S = ₦150,000 → S = ₦250,000.
What is a consequence of high inflation?
High inflation creates uncertainty, complicating long-term planning.
A fintech platform processes ₦10,000,000 monthly, earning 2.5% commission. Calculate the commission revenue.
Commission = 0.025 × ₦10,000,000 = ₦250,000.
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