Pre-board Examination

Class-XII
Business Studies
Time: 3 Hrs.
M.M: 80

General Instructions :
1)Answers to questions carrying 1 mark may be from one word to one
sentence.
2) Answers to questions carrying 3 marks may be from 50-75 words.
3) Answers to questions carrying 4-5 marks may be about 150 words.
4) Answers to questions carrying 6 marks may be about 200 words.
5) Attempt all parts of a question together.
1. McDonalds, the fast food restaurant, made a major change in its menu to
survive in the Indian Market. Which characteristic of management is
highlighted here? 1
2. Name the form of organisation which is not deliberately created.
1
3. A company purchase raw material from an ISO 9001 certified company.
Which type of plan is it?
1
4. Why are the principles of management called contingent?
1
5. Meesha is engaged in production of ready made garments for kids. She
recently started it on a large scale. What will be her working capital
requirement? 1
6. A company wants to establish a new unit in which a machinery of worth
Rs. 10 lakhs is involved. Identify the type of decision involved in financial
management. 1
7. Harpreet bought a car for Rs. 19 lakhs from an automobile company. He
found the engine defective. Despite many complaints, the defect was not
rectified. He filed a case in District Forum. Being unsatisfied with the
orders of the District Forum, he decided to appeal further. Suggest him
the highest authority where he could appeal, if not satisfied again by the
decision of the next higher authority.
1
 8. Ms. Suhani is fond of hand embroidery. She receives orders online and
delivers goods through courier. Which channel of distribution is it?
1
9. Mera Bharat Mahan Ltd. is a company manufacturing Khadi garments.
While preparing its plan, the management of the company takes into
consideration the prevailing business environment. It constantly adapts
to the changing environment by making changes in its plans. However, it
becomes very difficult for the management of the company to accurately
foresee future trends in the environment. Competition in the market
upsets its financial plans; the sales target have to be revised and
accordingly cash budgets also need to be adjusted since they are based
on sales figures.
a) Name and explain the limitation of planning highlighted in the above
case.
b) Identify and explain the two types of plans mentioned in the above
case by quoting lines from it.
3
10. SMV Ltd. has been manufacturing breads and biscuits for many years.
It has approximately 150 employees and most of them are not
happy with the working environment. Because of this the labour turnover rate
is very high. Therefore, the company appoints a new Human Resource
Manager, Navneet, to analyse the situation. Navneet finds that there is no free
flow of communication, and no suggestion box for the employees to voice their
suggestions or grievances. The company rarely organises a social or cultural
gathering, the employees just come, finish their work and leave the
organisation.
I) Identify the communication barrier discussed above.
II) State the category of this communication barrier.
III) Explain any other communication barrier of the same category.
3
11. Define Recruitment. State any two advantages of internal source of
recruitment. 3
12. A stock exchange is an institution which provides a platform for
buying and selling of existing securities. As a market, the stock
exchange facilitates the exchange of securities (shares, debentures,
etc.) into money and vice versa. It helps the company to raise finance,
provide liquidity and safety of investment to the investors, pricing of
securities, etc.
I) State and explain two more functions of Stock Exchange.
 II) Name the value which Stock Exchange strives to fulfil through its
functions. 3
13. Mr. Kshitij bought a new Transonic LED Television from Sharad
Electronics. The Sharad Electronics offered him to have free installation of
cable dish and 3 months free access to direct to home HD transmission. After
one month the cable company started charging him for the services. Identify
and state the rights, which Mr. Kshitij can exercise. 3
14. Fresh Air Electricals Limited is a company engaged in the business of
manufacturing of air conditioners. The company produces five star BIS rating
air-conditioners, which are not only energy efficient but also pollution free. The
company perceives the increasing temperature of Delhi as an opportunity. In
order to capture market share, the company directed its employees to work
overtime. To tackle shortage of workforce, the workers of the assembly
department are also asked to make delivery of the air-conditioners. However,
due to long working hours, the efficiency level of the employees decreased.
The workers started having feeling of being exploited, as they are not duly
compensated for their work. The workers are also becoming indisciplined. The
spirit of teamwork, which characterised the company previously, has begun to
disappear.
Identify any three principles of management, which are being violated by the
company. Support your answer by quoting the lines from the above case.
4
15. The Indian Corporate Sector has come face-to-face with several
challenges due to government policy changes. Explain any four such
challenges. 4
16. Brighter World Private Limited is a company engaged in the business
of manufacture of high quality paper. In order to achieve production targets,
the company identifies a process consisting of various activities to be
undertaken by different departments of the company. The work was then
divided, to be handled by various departments of the company.
After a few years of profitable existence, the company decided to transfer the
decision-making authority to the workers. For this, a major policy decision was
taken.
a)Identify the function and concept of management referred to above.
b)State the next two steps of this function.
c)Also identify two values, which company wants to communicate to the
society. 4
17. Edward Ltd. is a highly reputed company and many people want to
join it. The management has started following a process by which the financial
and non-financial needs of the employees are identified and met satisfactorily.
As a result, the output level of the employees has touched a new high.
Recently, the HR department of the company was also rewarded for doing its
job in the best possible manner in the industry. Two years ago, before starting
this process of identifying and meeting the needs of the employees, dissatisfied
workers were leaving the company. However, the situation has changed now
and many new candidates are eager to join the company. The management
intends to maximise the staff output and has taken various steps in this
regard., including creating a healthy work environment to ensure that the
employees are regular and sincere in their work.
a) Which concept of directing has been used by the management?
b) Which benefits of this concept are highlighted in the above para.
4
18. Dhruv was a lock manufacturer in Delhi. He used to manufacture
locks in his garage. Every evening, he would go to the local markets and sell
locks to retailers. He would also sell locks by going door-to-door in the
residential society near his house. He used to sell locks without any name. The
lock he used to sell consisted of key locks, number locks and computerised
locks. One day his wife suggested to him to name his locks so that the locks
are recognise in the market. He named his locks as Hi-Safety Locks and started
selling the locks under the same name. There were now three categories of
lock-- Hi-Safety Key Locks, Hi-Safety Number Locks and Hi-Safety Computer
Locks. With the naming of locks, his business started growing and soon there
was a substantial increase in revenue.
a) Which function of marketing is highlighted in the above case?
b) Which element of promotion mix has been highlighted in the above case?
c) What two types of names do you see in the above case?
d) Which of the above two identified names is better? Why?
4
19. Differentiate between 'capital market' and 'money market' on the
basis of:
i)Safety; ii) Meaning; iii) Instruments; and iv) Duration
4

20. Hamara Vidyalaya is facing a severe space problem in its library. It

decided to weed out old books so that new course books for the students can
be brought. Looking at the huge amount of books, which are redundant, it was
decided that books would be sorted out first on the basis of departments, like,
Commerce, Science and Arts. Then, subject teachers of each department
according to the subjects they are teaching will visit the library on the
scheduled date and identify the books. The teachers will give in writing the
edition and year prior to which the books of each subject are to be weeded out.
The same information was passed on to the departmental heads so that report
can be prepared and handed over to the principal of the school. The work was
over in a month's time. Some of the weeded out books were given to poor
children studying in the evening classes and rest were donated to the public
library in the nearby village.
1. Identify the function of management being performed by Hamara
Vidyalaya.
2. Quoting the lines from the above case, identify and explain the process
carried out by that function.
5

21. 'The functions and performance of the supervisor are vital to an

organisation because he is directly related to the workers whereas other
managers have no direct touch with bottom level workers.' In the light of this
statement, explain any four functions of a supervisor. 5

22. Identify the steps of controlling process in the following situations:

I) Management of Super Ltd. replaced the old machinery with latest
technology for improving the quality of products.
II) The production manager of Zara Ltd. conducted work study for the
determination of standard time to be taken for producing one unit.
III) Marketing manager of Young India Ltd. prepared a Variance analysis
report for the management. Explain the difference between actual sales
and target sales.
IV) Marketing manager calculated the total sales and revenue earned by
each sales executive to conduct appraisals at the end of the financial
year.
V) Finance director analysed deviations between profit forecast and actual
profit to find causes of deviation.
5

23. Coordination is the essence of management. Do you agree?

Give reasons. 6
 24. Cherry Foods Ltd. wants to raise Rs. 15,00,000 for its new project.
The Management is considering following Capital Structure Mix to raise this
amount:

Alternative
Capital Structure I(Rs.) II(Rs.) III(Rs.)
Equity 15,00,000 10,00,000 5,00,000
Debt 0 5,00,000 10,00,000
Other details are as follows:
Interest Rate on Debt 8%
Face Value of Equity Shares Rs. 500 each
Tax Rate 30%
Earning before Interest and Tax(EBIT) Rs. 3,00,000
i)Which of the above alternatives would be most beneficial for the equity
shareholders?
ii)Does EPS always rise with increase in debt?
6

25. Define marketing and explain briefly the various functions of

marketing? 6