Class 12 Business Studies Sample Paper
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CBSE Sample Papers for Class 12 Business Studies
Class 12 Business Studies Sample Paper Term 2 Set A
1. Identify and explain the tests which are to be conducted to ascertain the intelligent quotient and capacity of learning new skills of a candidate to develop.
Answer: The test which needs to be conducted to assess the intelligent quotient of a candidate is Intelligent test.
This is one of the psychological tests which measure the level of intelligence quotient of an individual. It is an indicator of a person’s learning ability or the ability to make decisions and judgments.
The test which needs to be conducted to know the capacity of a candidate to learn new skill is Aptitude test. It is a measure of individual’s potential for learning new skills and person’s capacity to develop
2. Mr. Naveen and Mr. Praveen are the directors of Sujata Ltd. and are discussing about how to raise the funds in the market. Mr. Praveen said they wanted to earn high yield of return irrespective of the risk involved in it.
(a) About which market Mr. Naveen and Mr. Praveen were talking about?
(b) What are its sub-markets or components?
(c) How can Mr. Praveen raise the funds?
Answer: (a) Mr. Naveen and Mr. Praveen are talking about raising funds from the capital markets which provides long- term capital money and provides higher returns for their investment through relevant profits.
(b) The sub-markets or components of capital markets are primary and secondary markets and the financial instruments used in these markets are equity and debt.
(c) Mr. Praveen can issue new securities in primary markets. They can make a public issue and become a listed company in the stock exchange. They could also consider e-IPOs (Electronic Initial Public Offer) where investors can bid for new shares through internet.
3. Explain the concepts which are related to finding possible candidate and identifying and choosing the best person.
Answer: The concept related to “Finding possible candidate” is Recruitment.
Recruitment is defined as “the process of searching for prospective employees and stimulating them to apply for jobs in an organisation.”
The concept related to “Choosing the best person” is selection.
Selection is the process of identifying and choosing the best person out of a number of prospective candidates for a job. Selection is negative process as the candidates are being rejected in this process.
4. Virendra wants to run his company in a different manner. He wants to set standards to be achieved in both qualitative as well as quantitative terms. He wants to judge the motivation, skill levels and satisfaction of the employees. All these things will require qualitative standards. On the other hand the company will have to set quantitative standards for the number of units produced.
Identify the step of controlling process applicable in the above case.
Answer: Setting performance standards is the step which is being referred here.
The first step in the process of controlling is concerned with setting performance standards. These standards are the basis for measuring the actual performance.
5. Hemant is working in a multinational company in Gurugram. He was running a temperature for the last many days. When his blood was tested, he was found to be positive for Covid-19. He was admitted in a hospital as his condition was very serious. One of his colleagues sent a text message to his superior, Mr. Bishnoi. Mr. Bishnoi immediately sent a text message to the employees of the organisation requesting them to donate plasma for Hemant. When the General Manager came to know about it, he ordered for sanitisation in the company premises and cleaning the surroundings. Explain the different types of communication which took place in whole situation.
Answer: Informal Communication:
Informal communication is generally referred to as the ‘Grapevine’ because it spreads throughout the organisation very rapidly with its branches going out in all directions. It is difficult to assess the source of generation.
“One of his colleagues sent a text message to his superior, Mr. Bishnoi. Mr. Bishnoi immediately sent a text message to the employees of the organisation requesting them to donate Plasma for Hemant.”
Formal communication flows through official channels designed in the organisation chart. This communication takes place between a superior and subordinate or among employees or managers of same levels.
6. Differentiate between formal and informal communication.
Discuss the features of motivation.
Answer: Differences between formal communication and informal communication are:
Motivation is the process of stimulating people to action to accomplish desired goals. Motivation depends upon satisfying needs of people.
Features of Motivation:
(a) Motivation is an internal feeling: The urge, drives, desires, aspirations, striving or needs of human being, which are internal, influence human behaviour.
(b) Motivation can be either positive or negative: Positive motivation provides positive rewards like increase in pay, promotion, recognition etc., Negative motivation uses negative means like punishment, stopping increments, threatening etc. which also may induce a person to act in the desired way.
(c) Motivation is a complex process as the individuals are heterogeneous in their expectations, perceptions and reactions.
(d) Motivation produces goal directed behaviour.
7. Kamini runs a designer boutique in Gurgaon. She’s doing well in terms of profits. She wants to open branches in different parts of India. Identify the type of decision being referred here. Discuss any three factors which can affect this decision.
Answer: The decision which is being taken by Kamini is investment decision.
The investment decision relates to how the firm’s funds are invested in different assets. Investment decision can be long-term or short-term. A long-term investment decision is also called a Capital Budgeting decision and short-term is Working Capital Decision.
The factors that will affect this decision are:
(a) Cash flows of the project: When a company takes an investment decision involving huge amount it expects to generate some cash flows over a period. These cash flows are in the form of a series of cash receipts and payments over the life of an investment.
(b) The rate of return: The most important criterion is the rate of return of the project. These calculations are based on the expected returns from each proposal and the assessment of the risk involved.
8. A.S. Ltd.’ is a large company engaged in assembly of air-conditioners. Recently the company had conducted the ‘Time’ and ‘Motion’ study and concluded that on an average a worker can assemble ten air-conditioners in a day. The target volume of the company in a day is assembling of 1,000 units
of air-conditioners. The company is providing attractive allowances to reduce labour turnover and absenteeism. All the workers are happy. Even then the assembly of air-conditioners per day is 800 units only. To find out the reason the company compared actual performance of each worker and observed
through C.C.T.V. that some of the workers were busy in gossiping. Identify the function of management and two steps of process of function of management which is being highlighted here.
Answer: The function of management being performed here is Controlling. Controlling means ensuring that activities in an organisation are performed as per the plans.
Following steps of controlling are identified in the given para:
(a) Setting performance standards which are the criteria against which the actual performance would be measured.
‘…. and concluded that on an average a worker can assemble ten air-conditioners in a day.’
(b) Measurement of actual performance with the standards in an objective and reliable manner.
‘Even then the assembly of air-conditioners per day is 800 units only.’
(c) Comparing actual performance with standards to find out any deviations.
‘…. the company compared actual performance of each worker and observed through C.C.T.V’.
9. Discuss the three redressal agencies under Consumer Protection Act, 2019.
What are the reliefs available to the consumer under Consumer Protection Act, 2019?
Answer: As per Consumer Protection Act, 2019, the statute establishes a three–tier system for resolving consumer complaints, as follows:
(a) District Commission:
The state concerned establishes district forums in each district. The following are the keycharacteristics:
(i) It is made up of a President and two members, one of whom must be a woman, who are officially nominated by the state government.
(ii) The value of consumer complaints should not exceed ` 1 crore.
(iii) If any of the party is not satisfied with the district forum’s decision, they have 45 days to file an appeal with the state forum from the date of order.
(b) State Commission:
The government establishes a state commission in each state. The following are the key characteristics:
(i) Each commission has a president and at least two members appointed by the state government, one of whom should be a woman.
(ii) The total worth of the products or services, including the compensation sought, is greater than ` 1 Crore but less than ` 10 crore.
(iii) If any of the parties is not pleased with the judgement, they can file a complaint with the national commission within 30 days of the order being issued.
(c) National Commission
Central government sets the National Commission. The provisions are:
(i) It is made up of a President and at least four members chosen by the central government, one of whom should be a woman.
(ii) All complaints relating to products and services with a compensation value above ` 10 crore can be filed with the National Commission.
(iii) The National Commission has the authority to issue orders for product replacement and loss compensation, among other things.
(iv) If any of the parties is not pleased with the decision taken, they can file a complaint with the Supreme Court of India within 30 days of the order being issued.
Reliefs available to the Consumer are:
(a) Removal of flaws in the goods.
(b) Removal of the deficiencies in the services.
(c) Replacement of damaged goods with new ones that is free of flaws.
(d) Refunding the complainant for the price paid by him.
(e) Payment of an appropriate amount of compensation for any loss or injury that has occurred.
(f) In suitable circumstances, payment of punitive damages.
(g) Discontinuance or abandonment unfair/restrictive trade practices.
(h) Discontinuance of the sale of hazardous goods and services.
(i) Payment to the consumer welfare fund (not less than 5%) which is to be used in the prescribed manner.
(j) Run corrective advertisements to counteract the effect of misleading advertisements.
(k) Reimburse all parties for their expenses.
10. Differentiate between capital market and money market.
Answer: Differences between capital market and money market are:
11. Cabana Ltd. purchased new machinery from Germany for manufacturing some auto components. It was a cost-effective and quality production machine but during the production process, manager observed that the quality of the production was not as per standards. On investigation, it was found that there was lack of knowledge of using these hi-tech machines. So, frequent visits by engineers were required from Germany but this resulted in high overhead charges.
Suggest what can be done to develop the skills and abilities of employees for producing quality products by using these hi-tech machines. Also state how the employees or the organisation will be benefited by your suggestion.
Answer: Training should be provided to the employees to develop their skills and abilities for producing quality products by using these hi-tech machines.
The benefits of imparting training to the employee are as follows:
(a) Better career: Training leads to better career opportunities for the employees as it helps to improve their skills and knowledge of doing the job.
(b) Increased earnings: Training leads to increased performance by the employees thereby helping them to earn more.
(c) Increased efficiency: Training makes the employees more efficient in handling machines and less prone to accidents.
(d) Improved motivation: Training increases the satisfaction and morale of employees thereby motivating them to work with greater enthusiasm.
12. Seema runs a utensils manufacturing company. She earned ` 500 crore out of this business. She doesn’t know how to appropriate these profits. Discuss any five factors which will help her in taking this decision.
Hemant, a businessman, is engaged in the purchase and sale of bread. Identify his working capital requirements by giving reasons to support your answer. Now, he is keen to start his own bread factory.
Explain any two factors that will affect his fixed capital requirements.
Answer: The five factors which will help Seema, in taking the dividend decision are described below:
(a) Earnings: Since the dividends are paid out of current and past earnings, there is a direct relationship between the amount of earnings of the company and the rate at which it declares dividend. If the earnings of the company are high, it may declare a higher dividend or vice-versa.
(b) Cash flow position: Since the dividends are paid in cash, if the cash flow position of the company is good it may declare higher dividend or vice-versa.
(c) Access to capital market: The company enjoys an easy access to capital market because of its credit worthiness. It does not feel the need to depend entirely on retained earnings to meet its financial needs. Hence, it may declare higher dividend or vice-versa.
(d) Growth prospects: If the company has any forthcoming investment opportunities, it may like to retain profits to finance its expansion projects. This is because retained profits are considered to be the cheapest source of finance as it doesn’t involve any explicit costs. Hence, it may declare lower dividend or vice- versa.
(e) Preferences of the shareholders: The companies paying stable dividends are always preferred by small investors primarily if they want regular income in the form of ‘stable returns’ from their investments. Large shareholders may be willing to forgo their present dividend in pursuit of higher profits in future. Therefore, the preferences of the shareholders must be taken into consideration.
The working capital requirements of Hemant will be less as he is engaged in trading business. Working capital is the capital which one needs for its day to day operations.
Working Capital = Current Assets – Current Liabilities
Fixed capital refers to investment in long-term assets. Management of fixed capital involves allocation of firm’s capital to different projects or assets with long-term implications for the business.
The two factors that will affect his fixed capital requirements when he will start his own bread factory are described below:
(a) Level of collaboration: If Hemant gets an opportunity to set -up his factory in collaboration with another enterprise, his fixed capital requirements will reduce considerably else his fixed capital requirements will be more.
(b) Financial alternatives available: If Hemant is able to get the place to start the factory and machinery on lease, his fixed capital requirements will reduce considerably. Whereas if he decides to purchase them, his fixed capital requirements will be more.