Sangam School of Excellence

Pre Board 1
CLASS 12 - BUSINESS STUDIES

Time Allowed : 180 mins Maximum Marks : 80

General Instructions:

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.

Section A

1 Aditya Jhawas working [1]

in Line Ltd. , a
company
manufacturing air
purifiers. He found that
the profits had started
declining from the last
six months. Profit has
an implication for the
survival of the firm, so
he analysed the
business environment
to find out the reasons
for this decline.

Identify the level of

management at which
Aditya Jha was
working.

a) Top Level
 Management

b) Floor level
management

c) Operational
Management

d) Middle Level
Management

2 Which of the following [1]

is a development
function of Securities
and Exchange Board of
India?

a) Undertaking steps
for investor protection

b) Prohibition of
fraudulent and unfair
trade practices

c) Training of
intermediaries of the
securities market

d) Promotion of fair
practices and code of
conduct in the
securities market

3 If the end result is [1]

clear it becomes
easier to work
towards the goal .
Identify the step of one
of the functions of
management
highlighted above.

a) Implementing the
plan

b) Developing
Premises
 c) Follow - up action

d) Setting Objectives

4 ‘Dovex’ was a large [1]

company with a
renowned name in
healthcare industry,
specialising in the
development and
production of life
saving medications and
medical devices. With a
strong reputation for
ethical practices,
‘Dovex’ attracted a
large number of
investors who had
great faith in the
company’s future. This
allowed ‘Dovex’ to
raise capital easily
from the market
whenever expansion or
new projects were to
be undertaken. As a
result, it could pay high
dividends to the
shareholders. The
factor affecting
dividend decision
discussed above, which
allowed ‘Dovex’ to pay
high dividends to the
shareholders is:

a) Cash flow position

b) Legal constraints

c) Stock market
reaction

d) Access to capital
market

5 Controlling is: [1]

 a) both forward and
backwards - looking

b) Backward - looking

c) neither forward nor

backwards - looking

d) Forward - looking

6 Identify the principle of [1]

management followed
in the following
pictorial
representation.

a) Remuneration

b) Equity

c) The Degree of
Centralization

d) Authority and
Responsibility

7 Indentify the [1]

participant of primary
market from the
following ________.

a) All of these

b) Mutual funds

c) Individuals

d) Banks

8 Manish, a Chief [1]

Manager in a company
using highly
sophisticated machines
and equipments, and
wants that every
employee should be
 fully trained before
using the machines and
equipment. Suggest the
best method of training
that Manish can use for
training of the
employees.

a) Free - rein
leadership

b) All of these

c) Autocratic
leadership

d)
Democratic/Participati
ve leadership

9 Which of the following [1]

statement is false?

1. If a firm’s
business risk is
lower, its
capacity to use
debt is higher.

2. If the stock
markets are
bullish, use of
equity is often
preferred by
companies in
such a situation.

3. Working capital
affects both the
liquidity as well
as profitability
of a business.

4. Current assets
are never
financed
through long -
 term sources.

a) option (d)

b) option (a)

c) option (c)

d) option (b)

10 Assertion (A): [1]

Divisional Differen
tiation is suitable for
the organizations
planning for expansion
and diversification.

Reason (R): Separate

departments can be
added to the divisional
structure easily
without bothering the
prior departments.

a) Both A and R are

true and R is the
correct explanation of
A.

b) Both A and R are

true but R is not the
correct explanation of
A.

c) A is true but R is
false.

d) A is false but R is
true.

11 Adapting to a change in [1]

consumer preference
towards online
shopping, Fast -
Service started a
grocery delivery app. It
is a platform that
ensures 10 - minute
deliveries of groceries.
 Because of this service,
Fast - Service earned
huge profit within a
year. It planned to
expand its operations
and decided to raise
funds by directly
issuing its securities to
investors.

The market through

which Fast - Service
has decided to raise
funds for its expansion
is:

a) Money market

b) Both Primary and

Secondary markets

c) Secondary market

d) Primary market

12 There is more need of [1]

working capital in
businesses where the
demand to be seasonal.
What out of the
following is the cause?

1. Capital remains
stuck up for a
long time in the
raw material

2. Capital remains
stuck up for a
long time in the
manufactured
goods

3. More machines
are needed

a) C and B
 b) A and B

c) A and C

d) only A

13 Statement I: National [1]

Commission has a
jurisdiction to
entertain complaints
where value of goods
or services paid as
consideration exceeds
ten crores of rupees.

Statement II: If any of

the parties are not
satisfied by the order
of National
Commission can appeal
against such order to
the Supreme Court of
India within a period of
thirty days of such
order.

a) Both the Statements

I and II are correct.

b) Statement II is
correct and Statement I
is not correct.

c) Both the Statements

I and II are not correct.

d) Statement I is
correct and Statement
II is not correct.

14 Priya a home science [1]

graduate from a
reputed college has
recently done a
cookery course. She
wished to start her
own venture with a
goal to provide health
 food at reasonable
price. She discussed
her idea with her
teacher (mentor) who
encouraged her. After
analyzing various
options for starting her
business venture, they
shortlisted the option
to sell ready made and
r eady to make
vegetable shakes and
sattu milk shakes.
Then, they both
weighed the pros and
cons of both the
shortlisted options.
Identify the function of
management being
discussed above.

a) Organising

b) Controlling

c) Planning

d) Directing

15 During the Covid - 19 [1]

pandemic, the
restaurant industry
faced many challenges.
The slowdown led to
huge decrease in
demand. From April
2022, the effect of
Covid started reducing.
The economy started
picking up and a boom
was noticed in the
restaurant industry. As
a result, larger amount
of working capital was
required with
increased production
 and sales.

The factor affecting the

working capital
requirement discussed
above is:

a) Production cycle

b) Business cycle

c) Seasonal factor

d) Operating efficiency

16 Statement I: In some [1]

cases, the primary
package is kept
throughout the entire
life of the product.

Statement II:
Transportation
Packaging refers to
additional layers of
protection that are
kept till the product is
ready for use.

a) Statement II is
correct and Statement I
is not correct.

b) Statement I is
correct and Statement
II is not correct.

c) Both the Statements

I and II are correct.

d) Both the Statements

I and II are not correct.

17 Sanya Fashion Ltd . [1]

hired Deepak Sharma,
an ace fashion designer
to develop a new
product line. He
charged ₹ 50 lakh for
 consultation. The
company spent another
₹ 1.5 crore in
formulating the
marketing campaign
for launching their new
product line. Their
products were not
liked by the consumers
and the company could
generate a revenue of
₹ 15 lakh only from
this product line. Thus,
the cost incurred is not
justifying the benefits
derived from the plans.
Which limitation of
planning is reflected in
the above para?

a) Planning involves
huge costs

b) Planning leads to
rigidity

c) Planning is time
consuming

d) Planning reduces
creativity

18 Match the [1]

CHARACTERISTICS of
management in
Column I with their
correct
EXPLANATIONS in
Column II:
 a) (a) - (iii), (b) - (ii),
(c) - (i)

b) (a) - (iii), (b) - (i),

(c) - (ii)

c) (a) - (ii), (b) - (i),

(c) - (iii)

d) (a) - (ii), (b) - (iii),

(c) - (i)

19 Return on investment [1]

is computed as:

a) Total Investment×
EBIT

b) EBIT / Total
Investment

c) EBT / Total
Investment

d) EBIT× EBT

20 Controlling is afunction [1]

which brings back the
management cycle to:

a) Management

b) Planning

c) Organizing

d) Directing

21 Monika, Rashmi and [3]

Garima are childhood
friends. After
 completing their
education, Monika
joined a school as a
teacher. Rashmi joined
a firm as a Chartered
Accountant and Garima
as a General Manager
in a Multi - National
Company. After a long
time in a re - union
function of the school,
they met each other.
Rashmi said that they
were all professionals
now. Garima told
Rashmi that she can
say this about Monika
and herself, but not
about her since
Manager is not
considered a full
fledged professional.

Why did Garima say

that she was not a
professional? State any
three points in support
of your answer.

22 Explain briefly any [3]

three organisational
barriers to
communication.

OR

Google Inc. is an
American
multinational
corporation that is best
known for running one
of the largest search
engines on the World
Wide Web (WWW).
Every day, 200 million
people use it. Google
was named the 2014
"Best Company to
Work For" by the Great
Place to Work Institute
and Fortune Magazine.
The organization
topped the list for the
fifth time. The
company hosts
employee forums on all
Fridays where there is
an examination of the

20 most asked
questions. Moreover,
its employees can
make use of any of a
number of channels of
expression to
communicate their
ideas and thoughts.
Channels include
Google+ conversations,
a wide variety of
surveys, Fixits (24 -
hour sprints wholly
dedicated to fixing a
specific problem) and
even direct emails to
any of the Google
leaders.

In the above context:

1. Identify the type

of
communication
barrier being
overcome by
Google Inc. by
providing a
number of
channels of
expression to
their employees
to communicate
their ideas and
 thoughts.

2. Briefly explain
any two other
types of
communication
barriers.

23 Ramnath Ltd. is dealing [3]

in import of organic
food items in bulk. The
company sells the
items in smaller
quantities in attractive
packages. Performance
of the company has
been up to the
expectations in the
past. Keeping up with
the latest packaging
technology, the
company decided to
upgrade its machinery.
For this, the Finance
Manager of the
company, Mr. Vikrant
Dhull, estimated the
amount of funds
required and the
timings. This will help
the company in linking
the investment and the
financing decisions on
a continuous basis.
Therefore, Mr Vikrant
Dhull began with the
preparation of a sales
forecast for the next
four years. He also
collected the relevant
data about the profit
estimates in the
coming years. By doing
this, he wanted to be
sure about the
availability of funds
 from the internal
sources. For the
remaining funds, he is
trying to find out
alternative sources.
Identify the financial
concept discussed in
the above paragraph.
Also state any two
points of importance of
the financial concept,
so identified.
24 Suman wanted to [3]
purchase a sandwich
toaster. She checked
about the various
sandwich toasters
available online and
compared the prices so
that an intelligent and
wise choice could be
made. Then she went
to a nearby market to
buy the sandwich
toaster. Being an
informed consumer,
she looked for the
correct standardization
mark. The shopkeeper
showed her different
toasters but was
quoting a higher price
than the price she had
checked online. After
negotiating with the
shopkeeper, she was
able to bring the price
down. As a responsible
consumer, she asked
for a cash memo,
against the amount
paid for the product
and took the toaster
home. On opening the
package, she found an
 instruction booklet,
which she read
carefully. Then she
followed all
instructions step - by -
step and made nicely
toasted paneer
sandwiches for her
family.

1. State any two

responsibilities,
which have
been discharged
by Suman,
besides asking
for a cash
memo.

2. Explain the two

rights being
discussed in the
above case.

OR

State any three points

which highlight the
importance
ofconsumer protection
from consumer’s point
of view.

25 An auto company D [4]

Ltd. is facing a problem
of declining market
share due to increased
competition from other
new and existing
players in the market.
Its competitors are
introducing lower
priced models for mass
consumers who are
price sensitive. D Ltd.
sets its long - term
objective to increase
 profits by 20%
featuresand new
technological
advancements. For this,
the company raises₹
100 crore by issuing
equity shares.

1. Identify the type

of plan the
company is
preparing.

2. State its three

dimensions by
quoting the line
from the above
paragraph.

OR

Give the meaning of

‘policy’ and ‘strategy’
as types of plans.

26 How does controlling [4]

help in achieving
objectives and
improving
employee’smorale ?

OR

Vinber Ltd. set up a

manufacturing unit at
Bhiwadi in Himachal
Pradesh to
manufacture electric
geysers and supply
them to dealers all over
the country. Their
production target was
500 geysers per week.
It was decided by the
management that
variation in production
upto 10 units would be
acceptable. At the end
 of the first week, the
production was 450
geysers. The next week,
production increased
to 470 geysers. A week
later, production was
460 geysers. On
investigation, it was
found that fluctuation
in production was due
to irregular supply of
electricity.

1. The above para

discusses some
of the steps in
the process of
one of the
functions of
management.
Explain these
steps.

2. Also, state the

step(s) that
have not been
discussed in the
above para.

27 Name and explain with [4]

a suitable example the
technique of Scientific
Management given by
Taylor to differentiate
between the efficient
and the inefficient
workers.
28 Mahamana Enterprises [4]
is not only giving salary
to its employees but it
also offers bonus to
them over and above
the salary. To further
encourage the
employees, it
announced that it will
 provide a share in the
profits of the company
to them. These
incentives are helpful
in increasing the
purchasing power of
the employees.

State four other

incentives of the type
of incentive discussed
in the above para.

29 Ragu works as a waiter [4]

in a five - star hotel in
Mumbai. While serving
the customer he
overhears him at the
table saying that he has
made profits higher
than expected by
investing in the
securities market. So,
Ragu also decides to
make a nominal
investment from his
savings in the stock
market in pursuit of
higher gains.

In the context of the

above case: As a
financial consultant,
apprise him of the
steps involved in the
working of a Demat
system.

30 Ankush bought a high [4]

end microwave on
Diwali from a leading
electronic store. The
microwave had ISI
mark and Ankush
diligently went through
the instruction manual
so that he could use it
 properly. However, due
to faulty wiring there
was a short - circuit in
the microwave. He
called up the consumer
helpline of the
company many times
but no solution was
provided by the
company. Ankush now
decided to file a case in
the consumer court.

1. Identify and
explain the right
which Ankush
will exercise.

2. State two
responsibilities
which Ankush
had fulfilled
while
purchasing and
using the
microwave.

31 Explain the steps in the [6]

staffing process of
management after
Placement and
Orientation .

OR

There were two

vacancies for the post
of Assistant Manager in
Govind Electrics
Private Ltd. Pratik the
Human Resources
Manager identified one
suitable candidate
Vijay from within the
organization and
promoted him to the
post of Assistant
 Manager. For another
post, the Manager
Pratik took help of a
placement agency and
selected Sonu . After
six months, Pratik
observed that Vijay
performance was much
better than Sonu
performance though
Vijay was less qualified
than Sonu . Hence,
Pratik decided that in
future he will not make
any appointment with
the help of an outside
source. Explain any
four reasons on the
basis of which
Pratikwould have
taken the above
decision.

32 State any five [6]

characteristics of
business environment.

OR

In the year 2016, the

State Government of
Kerala had made it
mandatory for
Anganwadi hostels and
canteens in educational
institutions to secure
the Food Safety and
Standards Authority of
India (FSSAI) license to
ensure food safety. As
the educational
institutions also get
categorized as food
business operators in
the event of the annual
turnover of the hostels,
 they run exceeding Rs.
12 lakh per annum.

In the context of the

above case:

1. Identify and
explain the
various
dimensions of
the business
environment
being referred
to here.

2. List any two

values which
the State
Government of
Kerala wants to
convey through
this initiative.

33 Voltage fluctuations [6]

have been common
and quite high in India.
They harm our
electrical appliances
like televisions,
refrigerators and air
conditioners, often
leaving them in a
permanently damaged
condition. N - Guard
Company decided to
manufacture stabilizers
for North India where
the voltage fluctuation
ranges from 220 V to
230 V. Once the
demand for North
India was taken care of,
they decided to launch
stabilizers of varying
voltages from 90 V -
260 V for meeting the
requirements of
 voltage fluctuations in
other regions of India
also. Three engineers
were appointed for
South, West and East
regions of India, as the
voltage was different in
all the three regions.
Though all the
engineers were
appointed to
manufacture stabilizers
but the product
differed from region to
region.

1. Identify the
organisational
structure of N -
Guard Company.

2. State any two

advantages and
two limitations
of the structure
identified in the
above para.

34 Identify and explain [6]

the promotional tool of
marketing mix which is
an impersonal form of
communication and is
paid for by the
marketer. Also explain
any three benefits of
this tool.