Indraprastha WORLD SCHOOL

Paschim Vihar, New Delhi-110063.

SESSION 2024-25
SAMPLE PAPER 1
BUSINESS STUDIES (054)
Class: XII Maximum Marks: 80
Date: Time Allowed: 3 Hours
GENERAL INSTRUCTIONS
 This Question Paper has 34 questions and 8 printed pages.
 All questions are compulsory to attempt.
 Marks are indicated against each question.
 Answers to the questions carrying 3 marks should be from 50 to 75 words.
 Answers to the questions carrying 4 marks should be about 150 words.
 Answers to the questions carrying 6 marks should be about 200 words.
 Attempt all parts of the questions together.
 Follow the prescribed word limit while answering the questions.
 Mention the correct serial number of the question and attempt the paper neatly.

1. For taking the company out of losses, Ravi Kumar took over as the Managing 1
Director of the struggling Vova Watch Company' in January 2020. As soon as
he joined, he tried to find out the reason for the company not doing well. He
found that the employees were not involved in decisionmaking and they had to
just follow orders, resulting in low morale of employees. Recognising the need
for change, Ravi Kumar started on a journey to bring back the enthusiasm and
motivation of the employees. He initiated open dialogues and encouraged them
to actively participate in decision-making. Together, they developed action
plans to address the company's challenges regarding outdated designs and
inefficient production processes etc. As time passed, Vova Watch Company'
transformed from a struggling enterprise to a profit making enterprise.
Identify the leadership style of Ravi Kumar:
(A) Autocratic leadership style
(B) Democratic leadership style
(C) Free-rein leadership style
(D) Both (A) and (B)

2. Which of the following is an element of 'Social Environment'? 1

(A) Rates of saving and investment
(B) Expectations from the workforce
(C) The nature of relationship of our country with foreign countries
(D) Planned outlay in public and private sectors

3. Statement I: Delegation is the entrustment of responsibility and authority to 1

another, and the creation of accountability for performance.
Statement II: Irrespective of the extent of delegated authority, the manager
shall still be accountable to the same extent as before delegation.
Choose the correct option from the following:
(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.

4. ------------ refers to doing the task correctly and with minimum cost. 1
(A) Effectiveness (B) Coordination
(C) Process (D) Efficiency

5. Dovex' was a large company with a renowned name in healthcare industry, 1

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) Stock market reaction
(C) Legal constraints (D) Access to capital market

6. "It is a career oriented process designed to help the 5 employees in the progress 1
towards maturity and actualization of their potential capabilities." Identify the
process:
(A) Staffing (B) Selection
(C) Development (D) Training

7. 'SK Builders' became the market leader in the designer house segment as it was 1
the first to recognize the need of using Artificial Intelligence in designing
houses in the changing environment of technological advancement.
This highlights the following point of importance of business environment:
(A) It helps to identify threats and early warning signals.
(B) It enables the firm to identify opportunities and getting the first mover
advantage.
(C) It helps in tapping useful resources.
(D) It helps in improving performance

8. In the ---------- market, prices are determined and decided by the management 1
of the company.
(A) Primary (B) Secondary
(C) Money (D) Stock

9. The process of estimating fund requirements of a business and specifying the 1

sources of funds is called:
(A) Capital structure (B) Financial planning
(C) Financial management (D) Capital budgeting

10. Statement I: A financial market facilitates the transfer of savings from savers to 1
investors.
Statement II: It gives savers the choice of different investments and helps to
channelise surplus funds into the most productive use.
Choose the correct option from the following:
(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

11. Choose the incorrect statement from the following about functions of a Stock 1
Exchange:
(A) Provides liquidity and marketability to new securities
(B) Ensures safety of transactions
(C) Contributes to economic growth
(D) Provides scope for speculation

12. Online retailer 'Bizen' has grown to be the biggest provider worldwide in the 1
field of e-commerce. Its revenues are growing steadily year after year. It owes
its success to the rapid rate of digitisation and its organisational structure.
'Bizen's Managing Director, Mohit makes strategic decisions and has control
over the entire organisation. In 'Bizen', jobs of similar nature are grouped
together into Human Resource Department, Marketing Department, Purchase
Department and Research and Development Department. These departments are
further divided into sections and all departmental heads report to Mohit who is
the co-ordinating head. This ensures efficiency in the utilization of manpower
and minimizes duplication of efforts. The type of organizational structure of
'Bizen' is:
(A) Informal organisational structure
(B) Divisional organisational structure
(C) Functional organisational structure
(D) Both (B) and (C).

13. Match the terms given in Column I with their meanings in Column II: 1

Column I Column II
1. Placement (i) Introducing the
selected employee to
other employees and
familiarising him with the
rules and policies of the
organization
2. Recruitment (II) It refers to the
employee occupying the
position or post for which
he/she has been selected
3. Orientation (iii) Evaluating an
employee's current and/or
past performance as
against certain
predetermined standards
4. Performance Appraisal (iv) The process of
searching for prospective
employees and
stimulating them to apply
for jobs in the
 organization

Choose the correct option from the following: (

(A) 1-(i), 2-(ii), 3-(iii), 4-(iv)
(B) 1-(ii), 2-(iii), 3-(i), 4-(iv)
(C) 1-(ii), 2-(iv), 3-(i), 4-(iii)
(D) 1-(ii), 2-(i), 3-(iv), 4-(iii)

14. Plans are prepared for a specific period of time, may be for a month, a quarter 1
or a year. At the end of that period, there is a need for a new plan to be drawn
on the basis of new requirements and future conditions.
The feature of planning reflected in the above lines is:

(A) Planning is futuristic

(B) Planning is continuous
(C) Planning is pervasive
(D) Planning is a mental exercise

15. Identify the tool of promotion used by 'Mehta Sons Garments' to boost its sales: 1
(A) Advertising
(B) Personal selling
(C) Sales promotion
(D) Public relations

16. Read the following statements: 1

Assertion (A) and Reason (R). Choose the correct alternative from the options
given below:
Assertion (A): Many enlightened business firms have set up their own
consumer service and grievance cells.
Reason (R): The consumer has a right to file a complaint and to be heard in case
of dissatisfaction with a good or service.
(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.

17. Which of the following is not a component of 'Physical Distribution'? 1

(A) Inventory control
 (B) Standardisation and grading
(C) Order processing
(D) Transportation

18. Beenu had a bookstore in Sabad called 'Book-mark'. For years, the bookstore 1
was doing reasonably well but with the rise of digital books and online retailers,
her sales had declined. Beenu's daughter, who had just completed her MBA
with a specialisation in marketing decided to launch a marketing campaign to
revive the bookstore. The campaign's focus was on the joy of reading books in
physical form, the joy of turning pages and the warm atmosphere of the
bookstore. She organised story writing and other competitions every weekend.
The information of these was given to the parents and children through
television, radio, children's magazines, etc. Attractive prizes were offered to the
winners. This increased the footfall of the children and their parents and the
bookstore soon became popular. The tool of communication used by Beenu's
daughter to revive the bookstore was:
(A) Advertising (B) Personal selling
(C) Sales promotion (D) Public relations

19. The marketing management philosophy which uses availability and 1

affordability as a means to achieve the objectives is:
(A) Marketing concept (B) Selling concept
(C) Product concept (D) Production concept

20. 'Best Electronics' is led by its visionary Chief Executive Officer, Nikhil. It has a 1
reputation for good quality products and customer service. Nikhil recognised
the need to continually innovate and provide customers with the latest products.
He wanted the company to be the market leader in electronics. Nikhil knew that
to realise his ambitious vision, he needed a clear and well-defined plan that
would provide broad contours of the company's business. His team conducted
extensive market research to uncover emerging trends, customer preferences,
and potential competitors. On its basis, a plan was prepared defining the
company's direction and scope in the long run. On the implementation of the
plan 'Best Electronics' became the market leader in two years. The type of plan
which helped 'Best Electronics' to become the market leader was:
(A) Policy (B) Rule (C) Strategy (D) Procedure

21. State any three features of business environment. 3

22. Kanav, after passing out of college with specialization in renewable energy, was 3
determined to start a solar power plant. The venture required heavy investment
in plant and machinery and less on manual labour. Kanav invested in the latest
solar panel technology and infrastructure and purchased the latest solar panels,
inverters and battery storage systems. Despite the high risk and substantial
investment, Kanav's business had good expansion possibilities. The world was
increasingly moving towards clean energy solutions, and there was a growing
demand for sustainable power sources. So, Kanav decided to create a higher
capacity to meet the anticipated demand quickly. This entailed further
investment in fixed assets which Kanav was able to arrange. As the years
passed, the solar power plant did very well and played a pivotal role in the city's
 transition towards a greener and more sustainable future. Identify and explain
the two factors affecting the fixed capital requirements discussed in the above
case.

23. A renowned car company named 'BB Motors' was known for producing high 3
performance cars. They were committed to ensure that its employees had the
skills and knowledge to build these innovative high-performance cars. To
achieve this, they implemented a unique approach for training. The company
transformed a section of its factory into what they called the 'Learning Floor'.
Actual work environment was created by allotting a specialized space. The
space was equipped with a range of car components, tools and sophisticated car
equipment identical to those used on the factory floor, where the company's
employees would undergo their training. Identify and explain the method of
training used by 'BB Motors' to ensure that its employees had the skills and
knowledge to build innovative high-performance cars.

24. State any three protective functions of Securities and Exchange Board of India. 3

25. ‘Verfab' was a garment manufacturing company known for its high quality 4
fashionable clothing. They had been in the fashionable clothing business for the
last 23 years. The company was earning enough profit and the demand for their
fashionable clothing was rising tremendously. The company was expanding and
needed to hire new talent to meet the growing demand. They followed a
comprehensive process to ensure that they brought in the best candidates. 16
The process began with a first-round evaluation of applications. The Human
Resources team carefully reviewed each candidate's qualifications, experience
and suitability for the available positions. It eliminated unqualified or unfit job
seekers based on the information supplied in the application forms and
shortlisted 21 candidates who met the basic requirements. The shortlisted
candidates were then asked to take a series of tests that attempted to measure
certain characteristics of individuals, ranging from manual dexterity to
intelligence to personality. These tests included assessments of their sewing
skills, attention to detail, and knowledge of garment manufacturing processes.
15 candidates who performed well in the tests were invited for a formal in-
depth conversation with the senior staff from the design team. Thereafter, 10
candidates were found suitable for the job position available. Since these 10
candidates had cleared all the above steps, 'Verfab' conducted verification by
contacting their previous employers to confirm the details the candidates had
provided. Thereafter, a decision was made to choose 8 candidates who were
best fitted for the roles.
Explain the steps of the comprehensive process discussed above till the
verification stage, to ensure that the company brought in the best candidates to
meet the growing demand for fashionable clothing.

26. State any four characteristics of management. 4

27. Differentiate between 'Delegation' and 'Decentralisation' on any four bases. 4

28. Explain how the following factors affect the working capital requirement of a 4
business: (i) Operating efficiency
 (ii) Credit availed

29. Piyush is the Production Manager of a shoe company 'Comforty'. He has 1000 4
workers under him in his department. Piyush booked a special order for 300
pairs of gents shoes at an estimated cost price of ₹ 500 per pair plus a 20%
profit margin. This order is to be completed within 10 days. After completion of
the order, Piyush found out that the production cost of one pair of shoes was ₹
700. He tried to find out the reason but he couldn't. He reported it to the Chief
Executive Officer. For this the Chief Executive Officer appointed Abhay, who
was not only a specialized Cost Accountant, but also a qualified Human
Resource Manager. After two days, Abhay reported that the set target could
have been completed by only 800 workers. This revealed that there was
overmanning in the organization, The organization was not utilizing the human
resources optimally which had led to high labour cost. The above case
highlights an important function of management.
(i)Identify the function of management discussed above.
(ii) State any three points of importance of the function identified in (i) above

30. Anuj, after a lot of research, paid 'SS Developers' an advance of ₹ 2 crore to 4
build a lavish house for him. They promised to deliver the property within 18
months. At the end of 18 months, Anuj asked for the delivery of the property
many times but the developer did not respond. Anuj realized that 'SS
Developers' was not in a position to hand over the property to him. Anuj asked
for a refund of the money with interest, which 'SS Developers' refused. Anuj
approached the consumer court with his complaint.
(i) Which grievance redressal agency had Anuj approached?
(ii) State any three reliefs Anuj is likely to get, if the consumer court is satisfied
with the complain

31. Explain the following techniques of Scientific Management: 6

(i) Time study
(ii) Differential piece wage system
(iii) Motion study

32. Atul Sharma was the Chief Executive Officer of a footwear company, 'Stepone 6
Footwear’. The company manufactured innovative and comfortable footwear
for all age groups. Atul Sharma was known for meticulous planning. He
ensured that the goals and objectives of the company are clearly stated so that
they act as a guide for deciding what action should be taken and in which
direction. Before each season, 'Stepone Footwear’ carefully analysed market
trends, customer preferences and production schedules. This analysis enabled
the company to look ahead and anticipate changes and develop managerial
responses, wherever necessary. As a result, they were able to consistently
deliver innovative and comfortable shoes to the market. During one season,
there was a sudden surge in demand for eco-friendly shoes. 'Stepone Footwear'
had already planned their production for the year with specific goals to be
achieved within a specific time frame. The managers of 'Stepone Footwear' did
not have the flexibility to change the plan to cope with the changed
circumstances. Another shoe company 'Eco Step' quickly adapted and started
manufacturing comfortable eco-friendly shoes. By not being able to adjust to
 the rapidly changing market, 'Stepone Footwear’ faced inventory surplus while
'Eco Step' emerged as a market leader in sustainable ecofriendly footwear.
Quoting lines from the above paragraph, identify and explain two benefits and
two limitations of 'Planning function of management discussed in the above
case.

33. Ayush and Rhea were passionate about sustainable 26 agriculture and healthy 6
living. They wanted to start a business selling organic produce. They had a
small farm in a rural area where they began growing fresh organic produce and
herbs. In the beginning, they faced challenges in marketing their organic
products. They realized that their high quality produce needed better
presentation and a strong identity to stand out in a competitive market. They
named the business ‘Earthy Store' which indicated the products' benefits and
qualities and reflected the values of the business - sustainablility and health.
They chose a 'logo' that incorporated elements of nature and used earthy colours
to convey their organic commitment. They designed and developed eco-friendly
biodegradable bags and reusable containers to courier their products to the
customers. They also added personal touch by including handwritten notes in
each bag. They also designed and developed product stickers with detailed
information about organic certification, nutritional benefits, date of
manufacture, date of expiry, etc. The stickers so developed were put on the bags
and reusable containers for customers convenience. ‘Earthy Store' created a
user-friendly website and established strong media presence to inform potential
customers about their products and persuading them to buy the same. Within a
couple of months, they had built a loyal customer base which made them earn
profits even in a competitive environment. In a year, they were able to secure
contracts with local grocery stores and restaurants.
Quoting lines from the above paragraph, identify and explain the three
functions of marketing discussed in the above case.

34. Give the meaning of "Training'. Explain the following methods of training: 6
(i) Apprenticeship Training, (ii) Internship Training