Solution

WORKSHEET

Class 11 - Business Studies

Section A
1.
(c) Strikes
Explanation: Natural Causes: Risks which arise due to the actions of Nature (and hence uncontrollable) are called natural
risks. For example, the risk of rainfall not occurring on time or excessive rainfall causing flood is a serious risk for farmers.
2.
(d) Tertiary industries
Explanation: Tertiary industries provide services which are auxiliary to trade and ensure the smooth transfer of goods from
producer to consumer. Auxiliaries to trade or aids to trade also provide the necessary support to trade. Such as transport,
warehousing, banking and finance, and insurance.
3.
(b) Only Pure risks
Explanation: Pure risks are those which cannot be controlled.
4.
(d) Salary or wages
Explanation: This doesn't characterize any business activity as business activities include any activity engaged in the primary
purpose of making a profit. This is a general term that encompasses all the economic activities carried out by a company during
the course of business.
5.
(b) Primary
Explanation: Primary industries are those industries that get raw material from nature.
6.
(b) Registrar of Firms
Explanation: Registrar of Firms
7. (a) one man one vote
Explanation: Cooperatives are run in a democratic manner, the affairs are managed by the elected managing committee
through One-Man-One-Vote.
8.
(c) Registrar of Companies
Explanation: Registrar of Companies approves the proposed name.
9.
(d) All of these
Explanation: All of these
10.
(c) Besides using business assets of ₹ 22,000, creditors can use the personal property of the owner to the extent of ₹ 25,000
Explanation: Besides using business assets of ₹ 22,000, creditors can use the personal property of the owner to the extent of ₹
25,000 because, in the case of Sole Proprietorship, creditors can recover their dues from the business assets as well as from the
personal assets of the sole proprietor.
11.
(c) Limited to their share of co-parcenery property
Explanation: Liability of Coparceners are Limited to their share of the co-parcenery property.
12.
(b) Unlimited
Explanation: Karta is the person who has full control over the Joint Hindu Family Business and has unlimited liability.

1 / 10
13.
(c) as long as partners want
Explanation: The partnership will continue at the will of all the partners. The business continues till all the partners mutually
agree to do so.
14. (a) Sleeping partner
Explanation: A person who does not take part in the day to day activities of the business is considered as a sleeping
partner. Sleeping Partner has Limited Liability that extend only upto the amount of capital they invest in the business.
15.
(b) Prospectus
Explanation: A Prospectus is a document issued by the company inviting the public and investors for the subscription of its
securities.
16.
(b) BIFR
Explanation: Reconstruction of sick public sector units is taken up by BFIR (Board for Industrial and Financial
Reconstruction).
17.
(b) All of these
Explanation: The different types of public sector enterprises are as follows: Departmental undertakings, Statutory
corporations, a Government company.
18.
(c) not binding on the company
Explanation: Preliminary contracts are contracts entered into by the promoters on behalf of the company before its
incorporation with third parties. Such contracts are legally not binding upon the company even after it comes into existence.
19.
(b) All of these
Explanation: There are various types of business in the private sectors, like Sole Proprietor, Partnership, Limited Companies,
Cooperatives, and Joint Hindu Family.
20.
(c) Public Sector Enterprises
Explanation: Statutory corporations are Public Sector enterprises brought into existence by a special act of the Parliament
21. (a) NEFT, RTGS
Explanation: NEFT, RTGS enables electronic fund transfer.
22.
(c) Business services
Explanation: Business services are referred to all activities that assist business such as shipping, finance etc.
23.
(c) storage
Explanation: A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers,
exporters, wholesalers, transport businesses, customs, etc.
24.
(d) stale cheque
Explanation: A stale check is a check that is presented to be cashed or deposited at a bank six months or more after the date it
was written.
25. (a) Floating
Explanation: Floating Policy is a policy which covers loss by fire caused to property belonging to the same person but located
at different places under a single sum and for one premium.
26.
(d) e-cash
Explanation: The payment mechanism that is typical to e-business is e-cash. E-cash is a computer-generated internet-based
system.

2 / 10
27.
(b) E-business
Explanation: E-business is the conduct of business processes on the internet. whereas e-commerce is a subset of e-business.
28. (a) All of these
Explanation: Debit Card, Credit Card and Net banking are a very popular method for making online transactions.
29. (a) e-Commerce
Explanation: e-business may be defined as the conduct of industry, trade and commerce using the computer networks. e-
commerce is a part of e-business.
30.
(b) C2C activities
Explanation: C2C markets provide an innovative way to allow customers to interact with each other.
31.
(b) all of these
Explanation: The smoke, effluents, and other waste released from the industries pollute the environment and hence affects the
health of the people. It is necessary to control pollution to preserve and improve the quality of the environment, to provide
benefits to mankind.
32.
(c) discretionary responsibility
Explanation: The discretionary responsibility is the purely voluntary obligation. The business organisation is not bound to
these obligations yet these affect business organisations. The donations for charitable purposes comes under discretionary
responsibility.
33.
(b) air pollution
Explanation: The injection of harmful gases such as carbon monoxide emitted from automobiles, smoke, and chemical from
factories, etc. reduce the quality of air. Thus cause air pollution.
34.
(b) air pollution
Explanation: The main cause of air pollution is harmful gases emitted by automobiles, smokes, and chemicals released from
factories and manufacturing plants.
35.
(c) All of these
Explanation: Reduced risk of liability, reduction of health hazards, cost savings can explain the need for pollution control.
36.
(c) Supportive
Explanation: Auxiliary to trade play a very supportive role and are considered to be an integral part of commerce.
Section B
37. No, the company cannot proceed with the allotment of shares to its applicants as the company has received only 85% applications,
which is not the minimum subscription. As per SEBI guidelines, a company must receive a minimum amount of applications i.e.
90% subscription against the entire issue amount, then only it can make an allotment of shares to the public.
38. a. Joint Hindu Family Business is governed by the Hindu Succession Act, 1956.
b. The eldest son, Lakshay has the right to exercise control over the family business as the 'Karta'.
c. The liability of Lakshay (Karta) is unlimited. The liability of Luv and Lok as coparceners is limited to the extent of their share
in the family business.
39. a. DTH (Direct to Home) service is being provided by Tata Sky.
b. The two other telecom services available in our country are described below:
i. Cellular Mobile services: It refers to various types of mobile telecom services including voice and non-voice messages,
data services and PCO services utilising any type of network equipment within their service area.
ii. Radio Paging services: It is an inexpensive means of transmitting information to the people even when they are on the
move. This service is available in different forms namely, tone only, numeric only and alpha/numeric paging.

3 / 10
40. i. Bank Overdraft: Is a temporary arrangement under which a depositor is allowed to draw by cheque more than the amount to
his credit up to a specified limit. It works as an approved loan where the interest is charged on the amount utilized.
ii. Speed Post: This service provides fast time-bound and guaranteed delivery of mail by the post offices on payment of extra
charge than normal postal charges.
41. Data stored in the system is exposed to a number of risks. The vital information may be stolen or modified to pursue some selfish
motives or just for fun. Such risks may be due to:
i. Virus (Vital Information Under Siege): Virus is a program (a series of commands), which imitates itself on other computer
systems. The protection from a virus attack can be provided by installing and timely updating anti-virus programs and
scanning disks before using them. Data may be intercepted in the course of transmission.
ii. Hacking: Hacking refers to unauthorized access to a computer network. The data can be protected by using cryptography,
which involves transmission (encryption) of data into some unreadable form (known as cyphertext) to ensure privacy.
iii. A threat to intellectual property and privacy risks.

Basis of
Traditional Business e-Business
42. Difference
Ease of Formation Difficult to form Easy to form

In traditional business, operating cost is high due to fixed charges Operating cost is low as a result of
Operating Cost being associated with investment in procurement and storage, reliance on network of relationships
production, marketing and distribution facilities. rather than ownership of resources.

Nature of contact
It involves indirect contact with the suppliers and customers There is direct interaction with
with the suppliers
through intermediaries. suppliers and customers.
and the customers
43. Consumers are the key figures in the market for the growth and development of a business.
The main responsibilities of business towards consumers are:
i. To supply a better quality of goods at the right time and at a reasonable price.
ii. To provide after-sale service on the basis of nature of a product.
iii. To provide information about the changes introduced by the business.
44. Social responsibilities like pollution control and environmental protection are very costly and often require huge financial
investments. Businessmen simply shift this burden of social responsibility by charging higher prices from the consumers instead
of bearing it themselves.
Section C
45. Yes, I agree that risk is an inherent element of business.
Reasons:-
i. Dynamic environment.
ii. Out of fashion of products.
iii. Natural disasters.
iv. Government policies.
v. Change in technology.
vi. External factors like competitors
vii. Quarrel among employees.
viii. Economic changes like (boom and depression)
ix. Customer behaviour and attitude.
x. Theft by internal or external parties.

46. BASIC BUSINESS PROFESSION

Qualifications, expertise and training in specific field as

Qualification No minimum qualification is necessary
prescribed by the professional body is a must
Mode of the Entrepreneur’s decision and other legal
Membership of a professional body and certificate of practice
establishment formalities, if necessary
Return Profit earned Professional fee

Risk Profits are uncertain and irregular; risk is Fee is generally regular and certain; some risk

4 / 10
 present

Code of
No code of conduct is prescribed Professional code of conduct is to be followed
Conduct.
47. Company form of the business organisation suffers from the following limitations-
i. Complexity information: The formation of a company requires greater time, effort and extensive knowledge of legal
requirements. It involves a lot of documentation, legal formalities, etc.
ii. Lack of secrecy: The Companies Act has made it compulsory for a public company to provide a lot of information to the
public as well as to the office of the Registrar of Companies from time to time. This makes it difficult for the company to
maintain secrecy about its operations.
iii. Impersonal work environment: Separation of ownership and management leads to situations in which there is a lack of
effort as well as personal involvement on the part of the officers of a company. The large size of the company further makes it
difficult for the owners and top management to maintain personal contact with the employees and customers.
iv. Numerous Regulations: The functioning of the company is subject to many legal provisions and compulsions. Different
types of documentation need to be submitted to various government agencies from time to time.
48. A prospectus is 'any document described or issued as a prospectus including any notice, circular, advertisement or other document
inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares or debentures of,
a body corporate'.
No, it is not necessary for every company to file a prospectus.
In case a public company decides to raise the funds through friends, relatives or some private arrangements as done by a private
company instead of inviting the public to subscribe to its shares or debentures, there is no need to issue a prospectus. Instead, a
'Statement in Lieu of Prospectus' is filed with the Registrar at least three days before making the allotment.
49. BHEL is a Government Company.
Features of Government Company.
i. It is an organisation created under the Companies Act, 2013 or any other previous Company Law.
ii. The company can file a suit in a court of law against any third party and be sued.
iii. The company can enter into a contract and can acquire property in its own name.
iv. The management of the company is regulated by the provisions of the Companies Act, like any other public limited company.
50. A Government Company is established under the Indian Companies Act, 2013 and is registered and governed by the provisions of
the Indian Companies Act, 2013.
According to the section 2(45) of the Indian Companies Act, 2013, a government company means any company in which not less
than 51 percent of the paid up capital is held by the central government, or by any state government or partly by central
government and partly by one or more state governments.
Three features of Government Company are:
i. It has a separate legal entity, apart from the government.
ii. It enjoys autonomy in all management decisions and takes actions according to business prudence.
iii. A Government Company can be established by fulfilling the requirements of the Indian Companies Act. A separate Act in the
Parliament is not required.
51. Insurable Interest: The insured must have an insurable interest in the subject matter of insurance. One fundamental fact of this
principle is that ‘it is not the house, ship, machinery, potential liability of life that is insured, but it is the pecuniary interest of the
insured in them, which is insured.’ Insurable interest means some pecuniary interest in the subject matter of the insurance
contract. The insured must have an interest in the preservation of the thing or life insured, so that he/she will suffer financially on
the happening of the event against which he/she is insured. In case of insurance of property, insurable interest of the insured in the
subject matter of the insurance must exist at the time of happening of the event. In order to name insurable interest however, it is
not necessary that one should be the owner of the property. For example, a trustee holding property on behalf of others has an
insurable interest in the property.
52. Four features of insurance are as follows:
i. Providing certainty: Insurance provides certainity of payment for the risk of loss. There are uncertainties of happenings of
time and amount of loss. Insurance removes these uncertainties and the assured receives payment of loss. The insurer charges
premium for providing the Certainity.
ii. Protection: The second main function of insurance is to provide protection from probable chances of loss. Insurance cannot
stop the happening of a risk or event but can compensate for losses arising out of it.

5 / 10
 iii. Risk sharing: On the happening of a risk event, the loss is shared by all the persons exposed to it. The share is obtained from
every insured member by way of premiums.
iv. Assist in capital formation: The accumulated funds of the insurer received by way of premium payments made by the
insured are invested in various income generating schemes.
53. E-Commerce, or "Electronic Commerce" is the process of selling and buying which is done via the web or the internet. Unlike the
physical store, in E-Commerce, there is no face to face interaction between the buyer and the seller in order to complete the whole
selling and buying process.
The Differences Between E-Commerce and E-Business:
i. Buying and selling things via the internet is known as E-Commerce. On the other hand, E-Business isn't limited to just buying
and selling activities. All the business activities conducted via the internet will be considered as E-Businesses. For example,
the information and computing technologies used to enhance one's business.
ii. E-Commerce is a main part of E-Business.
iii. Some people agreed that when business is completely carried through an electronic medium, then it can be referenced as E-
Business. There is no need for an E-Business to has a physical presence in the market. If a company owns an office, and along
with physical presence carries out their business activities via the internet, then it can be referred to as E-Commerce.
iv. E-Commerce includes any kind of business transaction related to money, but E-Business includes monetary and allied
activities.
v. E-Commerce needs the internet to be able to connect with the rest of the world. E-Business can use more than that. Other than
the internet, it also can take advantages of intranet and extranet to be able to connect with the parties.
54. Four benefit of E-business are as follows:
i. Ease of formation and lower investment requirements: Unlike a host of procedural requirements for setting up an industry,
e-business is relatively easy to start. The benefits of internet technology accrue to big or small business alike. In fact, internet
is responsible for the popularity of the phrase 'networked individuals and firms are more efficient than networked individuals'.
ii. Convenience: Internet offers the convenience of 24 hours, 7 days a week, 365 days a year business that allows shopping well
after midnight.
iii. Speed: Internet has high speed. This benefit becomes all the more attractive in the case of information regarding intensive
products.
iv. Global reach/access: Internet is truly without boundaries. On the one hand, it allows the seller an access to the global market;
on the other hand, it affords to the buyer a freedom to choose products from almost any part of the world. It would not be an
exaggeration to say that in the absence of internet, globalisation would have been considerably restricted in scope and speed.
55. the factors which might have been highlighted by the manager to the MD is as follows:
1. Long-term interest of the firm: A firm and its image stands to gain maximum profits in the long run when it has its highest
goal as ‘service to society’.
2. Avoidance of government regulation: From the point of view of a business, government regulations are undesirable because
they limit freedom.
3. Better environment for doing business: If business is to operate in a society which is full of diverse and complicated
problems, it may have little chance of success.
4. Converting problems into opportunities: Related with the preceding argument is the argument that business with its
glorious history of converting risky situations into profitable deals, can not only solve social problems but it can also make
them effectively useful by accepting the challenge.
56. a. 'Socially responsible way' refers to the concept of Social responsibility. Social responsibility means the obligation of a
business to make those decisions and perform those actions which are desirable in term s of the objectives and values of our
society.
b. The three ways in which the company can prove itself to be socially responsible are stated below:
i. The company should promote sustainable development by adopting alternate sources of energy like solar energy, using
biodegradable packaging material, etc.
ii. The company should promote gender equality by giving equal opportunities to both males and females.
iii. The company should work diligently towards social causes like education of a girl child, eradication of child labor, etc.
57. Following points justify equity investment as the best investment:
i. High Income: The equity share market is an ideal segment of the capital market responsible for the remarkable income of
investors. Wealth creation not only works through capital appreciation of such securities but also high dividend earnings
received by individuals.

6 / 10
 ii. Hedge Against Inflation: Investment in profitable equity shares increases the standard of living of individuals through asset
value appreciation. Money invested in equity shares offers manifold returns, higher than the rate of erosion of an individual’s
purchasing power due to inflation. Thus, the real value of investments tends to rise over time.
iii. Portfolio Diversification: Investors having a low aptitude for risk tend to stick with debt instruments, as it is less volatile.
However, stock and bond market fluctuations are inversely related when it comes to aggregate demand. Thus, when the bond
market is underperforming, risk-averse investors can profit from investment in best equity shares through stock market
investments.
iv. Marketability: The marketability of equity share on the stock exchanges makes them a lucrative source of investment.
58. The source of finance discussed is Inter-Corporate Deposits (ICD). The merits of Inter-Corporate Deposits are:
i. Free from Bureaucratic and Legal Problems: The biggest advantage is that the transaction is free from bureaucratic and
legal hassles.
ii. Secrecy is maintained: The brokers in this market never reveal the lists of lenders and borrowers as it is believed that in the
absence of secrecy rate of interest will fall abruptly.
iii. Meeting working capital requirements: ICD is a good source of finance to overcome the problem of shortage of working
capital.
Section D
59. Read the text carefully and answer the questions:
Elpis Ltd. took a loan of ₹ 50 lakh from a bank for its growth and expansion plans. The company was unable to repay the loan
amount because of heavy losses incurred in the business on a continuous basis. The management of the company asked its
shareholders to contribute towards repayment of the loan.
But the shareholders refused as they had already paid the full amount due on their shares. The bank filed a case against Elpis Ltd.
in the court. The court held that the shareholders of the company were not liable to repay the loan as they had not unpaid amount
on shares.
(i) (b) Yes, because the shareholders of a company are only liable to the extent of the amount unpaid on the shares held
by them.
Explanation: Yes, because the shareholders of a company are only liable to the extent of the amount unpaid on the
shares held by them.
(ii) (b) Separate legal entity
Explanation: Shareholders remain protected because Company has separate legal entity.
(iii) (d) Shareholders
Explanation: The board of directors of a Joint stock company is elected by Shareholders.
(iv) (d) Unlimited
Explanation: Maximum number of members in a private company must be unlimited because Elpis Ltd. is a Public
Company as it has the word Limited after its name.
(v) (d) 7
Explanation: Minimum number of members in Elpis Ltd. must be 7 because it is a public company.
Section E
60. The business objective is a goal i.e. where the business wants to reach. Every business is directed to the achievement of certain
objectives for its long time survival and growth. The five objectives of the business are:
i. Market standing: Market standing refers to the position of an enterprise in relation to its competitors. A business enterprise
must aim to increase its market standing by offering good quality products at reasonable prices and serving them better than
competitors.
ii. Innovation: Innovation is the introduction of new ideas or methods in the way something is done or made. There are two
kinds of innovation in every business i.e.
a. Innovation in product or service
b. Innovation in various skills and activities needed to supply them.
iii. Optimum Utilisation of Resources: Any business requires physical resources like plants, machines etc. and financial
resources i.e. funds to be able to produce and supply goods and services to its customers. Every business aims to acquire these
resources according to the requirements and must use them efficiently.
iv. Earning profits: One of the main objectives of the business is to earn profits on the capital employed. Profitability refers to
profit in relation to capital investment. Every business must earn a reasonable profit for its survival and growth.

7 / 10
 v. Social Responsibility: Business makes use of scarce resources of society. So, it must meet the expectations of the society. It
refers to the obligation of business firms to contribute resources for solving social problems and work in a socially desirable
manner.
61. Profit cannot be the sole objective of business due to the following reasons:
i. Disregard of Stake Holders: Profit helps to save the interest of shareholders alone. But business also has obligations towards
other stakeholders such as employees, customers, Government, society, etc.
ii. Mis Guide Management: In their craze for maximum profits managers may undermine the firm's future. They may fail to
invest in executive development, research, and development, etc.
iii. Overstress the Ends: Profit maximization overlooks the means that may be used. Any means which are against social interest
are injurious to business even if they generate huge profit.
iv. Outdated: Profit maximization is inconsistent with modern trends in business. Diffusion, share ownership, Professionalisation
of management, growing social consciousness, etc. is some of these trends.
Thus, profit is one of the objectives of the business. It should not be the sole objective of any business enterprise.
62. As per the Indian Cooperative Societies Act 1912, Co-operative Organisation is a society which has its objectives for the
promotion of the economic interests of its members in accordance with co-operative principles. In other words, a society is a
voluntary association of persons who join together with the motive of the welfare of the members.
Two types of co-operative organizations are-
i. Farmers' Co-operative Societies: These societies are formed to protect the interests of the farmers by providing better
resources at a reasonable cost. The basic purpose of forming these societies is to obtain benefits of large scale farming and
increase productivity. These societies provide better quality seeds, fertilizers, machinery, and other equipment for use in the
cultivation of crops. These societies help the farmers in solving the problems of doing farming on fragmented land holdings.
ii. Co-operative Housing Societies: These societies are formed to help their members to construct houses at reasonable costs.
These societies either construct flats or provide plots to the members at reasonable rates. The members are allowed to pay for
the same in easy installments.
63. i. Government Company is a suitable form of organization in the public sector where:
a. The government wants to promote and develop certain industrial and commercial enterprises in the national interest.
b. The government wants to control a company in the private sector without nationalization.
c. The government wants to go for collaboration with domestic and foreign enterprises of the private sector.
d. Business projects require government planning and funds.
ii. Statutory Corporations are found a most suitable form of public enterprise where:
a. Public utility services are to be provided at reasonable rates.
b. The government wants to develop projects for economic development.
c. Where government funding is required with private sector managerial efficiency to run the enterprise on competitive lines.
d. The government wants to promote those infrastructure areas where the private sector is unwilling to invest.
iii. Departmental Undertaking are the most suitable forms of organization in the public sector where:
a. The government wants full control over the operations of the enterprise.
b. National security is a major issue/concern.
c. The generation of revenue for the treasury is required.
d. The projects are to be carried on strictly according to the policies and direction of the government.
64. a. Life Insurance Corporation of India is classified as a statutory corporation.
b. Yes, it was necessary for the Parliament of India to pass the Life Insurance of India Act for its formation. The Act defines its
objectives, powers, and privileges.
c. The three merits of promoting Life Insurance Corporation of India as a statutory corporation are:
i. They are free from undesirable government regulation and control of the government and enjoy independence in their
functioning and a high degree of operational flexibility.
ii. The government generally does not interfere in their financial matters, including their income and receipts as the funds of
these organisations do not come from the central budget.
iii. Except for a few issues/matters which require prior approval of a particular ministry as per the Act, these are autonomous
organisations and frame their own policies and procedures within the powers assigned to them by the Act.
65. a. A public-private partnership (PPP, 3P or P3) is a cooperative arrangement between one or more public and private sectors,
normally of a long-term nature.
b. The two ways in which the government is likely to be benefited by pursuing projects under a PPP model are stated below:

8 / 10
 i. PPPs enable the government to take advantage of the expertise and efficiencies that the private sector can bring to the
delivery of certain facilities and services traditionally procured and delivered by the public sector.
ii. The collaboration helps to reduce the capital investment requirements of the government in various projects.
c. The three features of a PPP model are listed below:
i. A public-private partnership contract is normally of a long-term nature.
ii. PPPs often involve a contract between a public sector authority and a private party, in which the private party provides a
public service or project and assumes substantial financial, technical and operational risk in the project.
iii. Capital investment is made by the private sector on the basis of a contract with the government to provide agreed services
and the cost of providing the service is borne wholly or in part by the government.
66. i. Whole Life Policy: Under this policy the sum insured is not payable earlier than death of the insured. The sum becomes
payable to the heir of the deceased.
ii. Endowment Life Insurance Policy: Under this policy the insures undertakes to pay the assured to his heirs or nominees a
specified summon the attainment of a particular age or on his death whichever is earlier.
iii. Joint Life Policy: It involves the insurance of two or more lives simultaneously. The policy money is payable on the death of
any one olives assured and the assured sum will be payable to the survivor or survivors.
iv. Annuity Policy: This policy is one under which amount is payable in monthly, quarterly, half yearly or annual installments
after the assured attains a certain age. This is useful to those who prefer a regular income after a certain age.
v. Children’s Endowment Policy: This policy is taken for the purpose of education of children or to meet marriage expenses.
The insurer agrees to pay a assured sum when the child attains a certain age.
67. e-business, also known as electronic business, is the conduct of business on the internet. Its scope is not only confined to buying
and selling of products but also servicing customers and collaborating with business partners.
Benefits of e-business:
i. Ease of formation and lower investment requirements: Unlike a host of procedural requirements for setting up an industry,
e-business is relatively easy to start. The benefits of internet technology accrue to big or small businesses alike. In fact, the
internet is responsible for the popularity of the phrase 'networked individuals and firms are more efficient than networked
individuals'. This means that even if you do not have much of the investment(net worth) but have contacts(network), you can
do fabulous business.
ii. Convenience: Internet offers the convenience of 24 hours, 7 days a week, 365 days a year business that allows shopping
transactions to happen anytime from anywhere.
iii. Speed: Much of the buying or selling involves exchange of information that internet allows at the click of a mouse. This
benefit becomes all the more attractive in the case of information intensive products such as movies, music, e-books etc. that
can be delivered online.
iv. The movement towards a paperless society: Dependence on paperwork has been considerably reduced because of the high
usage of internet. Many companies and even the government departments and regulatory authorities are going in this
direction.
68. Some of the steps which can be taken by the business enterprises for environmental protection are as follows:
i. A Definite commitment by top management of the enterprise to create, maintain and develop work culture for preventing
pollution.
ii. Ensuring that commitment to environmental protection is shared throughout the enterprise by all divisions and employees.
iii. Complying with the laws and regulations enacted by the Government for the prevention of pollution.
iv. Participation in government programmes relating to the management of hazardous substances and clearing up of wastes.
v. Periodical assessment of pollution control programmes in terms of costs and benefits so as to increase the progress with
respect to environmental protection.
69. Type of debentures are:
i. Secured Debentures: Secured debentures are that kind of debentures where a charge is being established on the properties or
assets of the enterprise for the purpose of any payment. The charge might be either floating or fixed. The fixed charge is
established against those assets which come under the enterprise’s possession for the purpose to use in activities not meant for
sale whereas floating charge comprises of all assets excluding those accredited to the secured creditors. A fixed charge is
established on a particular asset whereas a floating charge is on the general assets of the enterprise.
ii. Unsecured Debentures: They do not have a particular charge on the assets of the enterprise. However, a floating charge may
be established on these debentures by default. Usually, these types of debentures are not circulated.

9 / 10
 iii. Redeemable Debentures: These debentures are those debentures that are due on the cessation of the time frame either in a
lump-sum or in instalments during the lifetime of the enterprise. Debentures can be reclaimed either at a premium or at par.
iv. Irredeemable Debentures: These debentures are also called as Perpetual Debentures as the company doesn’t give any
attempt for the repayment of money acquired or borrowed by circulating such debentures. These debentures are repayable on
the closing up of an enterprise or on the expiry (cessation) of a long period.
v. Convertible Debentures: Debentures which are changeable to equity shares or in any other security either at the choice of the
enterprise or the debenture holders are called convertible debentures. These debentures are either entirely convertible or partly
changeable
vi. Non-Convertible Debentures: The debentures which can’t be changed into shares or in other securities are called Non-
Convertible Debentures. Most debentures circulated by enterprises fall in this class.
vii. Specific Coupon Rate Debentures: Such debentures are circulated with a mentioned rate of interest, and it is known as the
coupon rate.
viii. Zero-Coupon Rate Debentures: These debentures don’t normally carry a particular rate of interest. In order to restore the
investors, such types of debentures are circulated at a considerable discount and the difference between the nominal value and
the circulated price is treated as the amount of interest associated with the duration of the debentures.
ix. Registered Debentures: These debentures are such debentures within which all details comprising addresses, names, and
particulars of holding of the debenture holders are filed in a register kept by the enterprise. Such debentures can be moved
only by performing a normal transfer deed.
x. Bearer Debentures: These debentures are debentures that can be transferred by way of delivery and the company does not
keep any record of the debenture holders Interest on debentures is paid to a person who produces the interest coupon attached
to such debentures.
70. i. Garish can meet his working capital prerequisite for short-go through the accompanying wellsprings of fund: Trade credit,
Public Deposits, Credits from Commercial Banks & Financial institutions, Commercial Papers, Overdraft
ii. Money related instruments utilized in International financing are Indian Depository Receipt (IDRs), Global Depository
Receipts (GDRs), American Depository Receipts (ADR), Foreign Currency Convertible Bonds (FCCBs) etc..
iii. The German Company can give Indian Depository Receipts (IDRs).
Features of IDRs:
It is an instrument designated in India Rupees as a vault receipt made by the Domestic Depository.
IDRs are effectively adaptable at the Indian Stock Exchange.
iv. Without including the general public and Banks, the choice accessible to the German Company to meet its working capital
necessity is Intercorporate Deposit. Inter Corporate Deposit is an unstable getting by an organization from other corporate
elements for short period.
71. i. The two types of capital being described above are as follows:
a. Fixed capital: 'he will need funds to buy land and building, machinery and furniture and fixtures'. Fixed capital refers to
the capital invested in fixed assets of a business. It is raised from long-term funds that remain invested in the business for a
period of more than five years.
b. Working capital: 'funds will be required to meet day-to-day operations such as maintaining stocks, bills receivables and
for meeting current expenses like salaries, wages, taxes, and rent.' Working capital refers to the capital invested in meeting
the day-to-day needs of a business that are met through short-term funds. Short-term funds are those funds that are
required for a period of not more than one year.
ii. The factors that are likely to affect the fixed capital requirements of a business are stated below:
a. Nature of business: The fixed capital needs of a manufacturing concern are higher than that of a trading concern.
b. The scale of business: When the scale of a business is large it will require more fixed capital or vice-versa.
iii. The factors affecting the working capital requirements of a business are stated below:
a. Growth Prospects: A business having expansion plans will require more working capital.
b. Credit allowed: If a business sells goods on credit, its working capital requirements will be more as compared to a
business which only allows cash sales.

10 / 10