Class: 12 Subject: BUSINESS STUDIES Marks: 80

Time: 3hrs Test Series – 1 Date:

General Instructions:
Read the following instructions carefully:
1. This question paper contains 34 questions.
2. Marks are indicated against each question.
3. Answers should be brief and to the point.
4. Answers to the questions carrying 3 marks may be from 50 to 75 words.
5. Answers to the questions carrying 4 marks may be about 150 words.
6. Answers to the questions carrying 6 marks may be about 200 words.
7. Attempt all parts of the questions together.

1. Narula Food Private Limited provided incentive scheme to its employees. The employees are offered company’s
shares at a set price which is lower than the market price. What is the incentive? 1
(a) Co-partnership (b) Retirement benefit
(c) Perquisites (d) Productivity linked wage incentives

2. The health and fitness trend has become popular among large number of urban people. This created a demand for
products like organic food, diet soft drinks, gyms, food supplements etc.
Identify the dimension of business environment being reflected here. 1
(a) Technological environment (b) Social environment
(c) Economic environment (d) Political environment

3. Standards should be set in _______ terms for effective controlling. 1

(a) Quantitative (b) Qualitative
(c) Neither (a) nor (b) (d) Both (a) and (b)

4. Which marketing philosophy focuses on existing product rather than on quality and quantity of product or
customer need?
1
(a) Selling concept (b) Production concept
(c) Marketing concept (d) Product concept

5. A manager believes in making the job more challenging for the employees by giving them higher targets that need
the use of variety of skills and providing more autonomy to achieve them. The incentive given by the manager is: 1
(a) Job enrichment (b) Status
(c) Employee empowerment (d) Organisational climate

6. Which of the following is not a feature of planning? 1

(a) Planning is the primary function of management.
(b) Planning is a mental exercise.
(c) Planning involves huge cost and time.
(d) Planning is continuous and pervasive.

7. Which of the following statements is incorrect? 1

(a) Planning is done for a given time frame.
(b) Planning is an exclusive function of the top level management.
(c) Planning involves making a choice from alternative courses of action.

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 (d) Planning is deciding in advance what to do and how to do.

8. The dispersal of decision-making authority among all the levels of organisation is: 1
(a) Scalar Chain (b) Decentralisation of authority
(c) Authority and Responsibility (d) Delegation of authority

9. A consumer buys a new refrigerator and pays full price for it. Later he discovered that its compressor was second
hand. He approaches the dealer, but he did not listen to him. Which right of consumer has been violated by the
dealer here? 1
(a) Right to be heard (b) Right to seek redressal
(c) Right to safety (d) Right to education

10. Identify the type of the organisation structure adopted by the company as it leads to occupational specialisation,
minimal duplication of effort which results in economies of scale and lowers the cost. 1

(a) Divisional Structure (b) Functional structure

(c) Informal organisation (d) Formal organisation

11. Read the following statements: Assertion (A) and Reason(R). Choose the correct alternative from those given
below: 1
Assertion (A): Finance is the life blood of business.
Reason (R): Finance is very essential for the smooth running of the business.
Alternatives
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

12. After completing his PGDBM course from IIM, Daksh took over the business of his father. Now he started making
a practical use of his theoretical knowledge of management. But right from the very beginning, he was faced with
one problem. For the last three years continuously, he had been observing that whatever the sales target he would
fix, he never succeeded to achieve it fully. He studied this problem thoroughly and found that it so happened

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because in the first year (of his taking over the business) the government at the centre changed; in the second year,
there was a change in fashion and in the third year, several competing firms entered the market. Now he realised
that planning does not foresee everything and that several problems come in the way of effective planning. Identify
the ‘limitation of planning’ in the event discussed above.
1
(a) Planning reduces creativity (b) Planning involves huge costs
(c) Planning leads to rigidity (d) Planning may not work in a dynamic environment

13. What is the other name of long-term decision? 1

(a) Capital budgeting (b) Working capital
(c) Gross working capital (d) Financial management

14. All the trading in securities is now done through computer terminals instead of open outcry system. This is: 1
(a) Electronic trading system (b) Dematerialisation of securities
(c) Demutualisation of stock exchange (d) None of these

15. Manufacturer send goods to the retailers in corrugated boxes containing many units is: 1
(a) Transportation packaging (b) Primary packaging
(c) Secondary packaging (d) None of these

16. Motivation is a complex process because ______. 1

(a) It may not have uniform effect on all the members. (b) It is an internal feeling.
(c) It can be either positive or negative. (d) It produces goal-directed behaviour.

17. Surana Papers Ltd is a paper manufacturing company in India. It is enjoying buoyant demand for its papers as
economic growth is about 8 to 9 percent and demand for steel is growing. The company has decided to set up a new
plant to cash on the increase demand. It is estimated that it will require about ₹4,000 crores to set up and about
₹500 crores of working capital to start the new plant. Identify the decision taken by the financial manager in the
above case?
(a) Financial decision (b) Investment decision 1
(c) Dividend decision (d) Capital structure decision

18. Violation of which of the following principle increases the recruitment, selection and training cost of employees?
(a) Initiative (b) Espirit de Corps 1
(c) Unity of Command (d) Stability of Personnel

19. Read the following statements. Choose the correct alternative from those given below: 1
Statement I: Social marketing concept is followed generally by marketers, in present time.
Statement II: Production concept is used where demand is more than supply.
Alternatives
(a) Statement I is true and Statement II is false
(b) Statement I is false and Statement II is true
(c) Both the statements are true (d) Both the statements are false

20. Read the following statements. 1

Statement I: Formal communication follows the officially established line of command and of
communication.
Statement II: Informal communication carries the message at a faster pace.
Choose the correct option from the options given below:

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 (a) Statement I is true and Statement II is false
(b) Statement II is true and Statement I is false
(c) Both the statements are true (d) Both the statements are false

21. Procter and Gamble’s (P&G) philosophy is that it should lead the industry in implementing a global
environmental programme. P&G is one of the first companies in the world to actively study the influence of
consumer products on the environment and introduce concentrated products, recycled plastic bottles, and refill
packages to the industry. P&G contributes to sustainable development and addresses environmental and social
issues connected with its products and services. Which Marketing Management philosophy is applied by Procter and
Gamble. Elaborate. 3

22.(A) Discuss the elements of Delegation. 3

OR
22. (B)Discuss the importance of Decentralization. 3

23. While analyzing their Financial Statements, for the year ended March 31, 2019, Gopal and Nirmala the partners,
discovered that in the current year, operating expenses increased by 5% against the expected rate of 3%. The
investigations revealed that it was due to the increase in the cost of raw material. They immediately directed their
Purchase Manager to find out the alternative sources of raw material. 3
(a) Which function of management is being performed?
(b) Discuss any two of its features.

24. (A) Explain any three determinants of working capital requirements. 3

OR
24. (B) Why are Capital Budgeting decisions so crucial in corporates? 3

25. (A) Define the concept of Financial Planning and list any three points highlighting its importance for an
organization.
4
OR
25. (B) Discuss any four factors affecting the dividend decision of a firm. 4

26.(A) Name and discuss the concept of the two functions of Marketing that are also called the pillars of marketing.
4
OR
26. (B) Ragini received an e-mail from HiFi Pvt Limited, an online retail fashion brand, offering a discount voucher of
₹999 on purchases of above ₹4,000 made before 20th December, 2022. 4
(a) State the promotional tool used by HiFi Pvt Limited.
(b) Also discuss other tools of promotion.

27. Soly Tiles Private Limited having a strong base in India, aims to expand its area of operation overseas in the next
two years. For this, it will need an investment of ₹5,000 crores, half of which will be met through retained earnings
and the rest to be arranged from other sources. To decide the most suitable source of finance, the Vice-President
(Finance) called for a meeting of his team. Considering the stock market conditions and the recession in the
economy, the team knew that it would be difficult to raise funds through equity. Hence, they decided to fulfill it
through the borrowings from financial institutions and issuing of debentures.
4
(a) State the function of management being performed.

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 (b) State the steps of the process of the function identified above in part (a) being performed.

28. Explain how principles of management: 4

(a) Provides useful insight into reality
(b) Helps in thoughtful decision-making

29. State the type of barrier mentioned in the following statements. 4

(i) These are concerned with encoding/decoding of messages.
(ii) A worried person cannot communicate properly.
(iii) Authority relationships and rules and regulations obstruct communication.
(iv) Personal factors of both sender and receiver.

30. The Hotel and Lodging Industry across the world are focused on meeting leisurely needs of their guests, rather
than basic ones, as they are well aware that majority of their guests avails their facilities to refresh themselves
physically and mentally. In doing so, the hotels offer a wide range of facilities that includes gourmet dining, luxury
spas, full-service health clubs with personal trainers, golf courses, tennis centres, cultural activities and children’s
day camps. While this sector can take the vacation of an individual to a totally different level, but it comes at a price.
Therefore, before finalizing their bookings, the customer always compares the sacrifice they make in terms of the
amount charged by a hotel for the facilities offered by it. By quoting the lines, identify the features of Marketing.
4

31.(a) Discuss any four points highlighting the importance of that managerial function which is concerned with filling
and keeping filled the positions in the organisation structure. 6
OR
31.(b) Discuss the process of that activity through which the best candidates are chosen out of a pool of applicants
for a particular position in an organization.
6

32. (a)Differentiate between primary and secondary market on any four basis. 6
OR
32.(b) In the backdrop of growing crimes against women, Gaonkar has just floated a private company by the name of
‘Suraksha’ to provide female bodyguards for women, while travelling or commuting between work and home. Being
new to business, he appointed Mr. Thukral as his finance manager and asked him to assess the finance needs of his
company. 6
(i) In which two categories, the finance needs of a firm can be categorised into?
(ii) Explain any five factors that Mr Thukral have to consider while determining the working capital
requirement for the company.

33. Read the statements given in point (i) and (ii), answer the questions that follows’ 6
(i) Roto Foods Pvt Ltd earned a net profit of ₹78 crores. Ritesh, the financial advisor, of company wants to decide
how to appropriate these profits.
(a) Identify the type of financial decision involved in this case.
(b) Explain two factors affecting such decision.
(ii) RKV Udyod Pvt Ltd is planning to replace existing machinery with modern machinery of higher production
capacity in order to cater to international markets.
(a) Identify the type of financial decision highlighted in this case.
(b) Explain any two factors affecting such decision.

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34. Buti Cosmetics Pvt Ltd manufacturing cosmetics, which enjoyed a pre-eminent position in business, has grown in
size. Its business was very good till 2015. But after that, entry of new online player in this segment the market share
of Buti Cosmetics Pvt Ltd has declined. The company followed a very centralised business model with directors and
divisional heads making even minor decisions. Before 2015, this business model had served the company very well
as consumers has no choice. But now, the company is under pressure to reform and decentralise.
6
(i) What do you understand by decentralisation? Can an organisation in general, be fully centralised or fully
decentralised?
(ii) Explain any three advantages of decentralisation.

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