Students can access the CBSE Sample Papers for Class 12 Business Studies with Solutions and marking scheme Term 2 Set 8 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Business Studies Standard Term 2 Set 8 with Solutions
Time Allowed: 2 Hours
Maximum Marks: 40
General Instructions:
- This is a Subjective Question Paper containing 12 questions.
- This paper contains 4 questions of 2 marks each, 4 questions of 3 marks each and 4 questions of 5
- 2 marks questions are Short Answer Type Questions and are to be answered in 30-50 words.
- 3 marks questions are Short Answer Type Questions and are to be answered in 50-80 words.
- 5 marks questions are Long Answer Type Questions and are to be answered in 80-120 words.
This question paper contains Case/Source Based Questions.
Question1.
Identify and explain the two sources of the source of recruitment which cannot be used when the existing
staff is either insufficient or does not fulfil the eligibility criteria of the jobs to be filled. [2]
Answer:
If the existing staff is either insufficient or does not fulfill the eligibility criteria of the jobs to be filled, the company should not use internal source of recruitment.
Two sources of internal recruitment are as follows:
- Promotion refers to shifting of an employee to a higher position, carrying higher responsibilities, facilities, status and pay. They do not need induction training.
- Transfer involves shifting of an employee from one job to another, one department to another, without substantive change in the responsibilities and status of the employee.
Question 2.
‘MYKAA Limited ‘is dealing in all types of cosmetic products. It is enjoying increased demand for
its product during the last few years. For the purpose of expansion the company needs ₹ 100 crores as additional capital. The company decides to raise funds through equity -shares. Chirag Kapoor, the finance manager of the company recommended that the shares may be sold through issuing houses or brokers. Identify and explain the method recommended by Mr.Kapoor through which the company can raise additional funds for expansion purposes. [2]
Answer:
The method recommended by Mr. Kapoor through which the Mykaa Limited can raise additional funds for expansion purposes is “Offer For Sale”
Under offer for sale, securities are not issued directly to the public but are offered for sale through intermediaries like issuing houses or stock brokers. In this case, a company sells securities embolic at an agreed price to brokers who, in turn, resell them to the investing public.
Question 3.
Explain the two concepts which are part of the exercise which would reveal whether a company is
understaffed, overstaffed or optimally staffed. [2]
Answer:
The two concepts which are part of the exercise which would reveal whether a company is understaffed, overstaffed or optimally staffed are:
(a) Workload Analysis: Work load analysis is an estimation of the number and the kind of persons required for the job to be performed. It would enable an assessment of the number and types of human resources necessary for the performance of various jobs and the accomplishment of organisational objectives.
(b) Workforce Analysis: It is an estimation of the number of workforce available. It analyses existing work force already occupying the job positions.
Question 4.
“Measurement of a company’s progress may involve calculation of certain ratios like gross profit ratio, net profit ratio, and return on investment etc. at periodic intervals”. Identify the function of management
involved in the above context. Also briefly explain the step in the process of the identified function discussed above. [2]
Answer:
The function of management involved in the above context is controlling.
The controlling function helps in measuring the progress towards the organisational goals and brings any deviations, and indicates corrective action.
The step of controlling process which is being indicated here is “Measurement of Actual Performance” Measurement of actual performance: After the standards are set, the next step is measurement of actual performance. Performance should be measured in an objective and reliable manner. There are several techniques for measurement of performance like personal observation, sample checking, performance reports, etc.
Question 5.
Mr. Pawan Kumar, the CEO of an E-Commerce start up, which was facing the problem of huge employee
turnover, decided to hold a meeting with the managers to discuss the issue. While addressing the managers in the meeting, he advised them to take certain measures which focus on psychological, social and emotional factors, in order to motivate employees. Explain any two such measures discussed by him, when he suggested that job should be made interesting so that the job itself becomes a source of motivation, employees should be congratulated for good performance, also, stability regarding future income and work should be provided to employees, in order to develop a positive attitude among the subordinates. [3]
Answer:
In the meeting, Mr. Pawan Kumar (CEO of the Company) talked about the non-monetary incentives (psychological, social and emotional factors) which can help in developing a positive attitude among the subordinates.
Two measures discussed by him are as follows:
(a) Job Enrichment: Job enrichment is concerned with designing jobs that include greater variety of work content, require higher level of knowledge and skill; give workers more autonomy and responsibility; and provide the opportunity for personal growth and a meaningful work experience. If jobs are enriched and made interesting, the job itself becomes a source of motivation to the employee.
(b) Job Security: It is an assurance that employees may have about continuing gainful employment throughout their lives. Job security can be assured by signing terms of contractual agreement, collective bargaining employment that can prevent arbitrary termination, job dismissal etc.
Question 6.
State any three points of importance of Directing.
OR
Define leadership as an element of Directing? Enumerate any two styles of Leadership. [3]
Answer:
Importance of Directing are:
- Directing helps to initiate action by people in the organisation towards attainment of desired objectives.
- Directing integrates employees efforts in the organisation in such a way that every individual effort contributes to the organisational performance so that organisational goals can be achieved.
- Effective directing helps to bring stability and balance in the organisation since it fosters cooperation and commitment among the people.
- Directing helps employees in realising their full potential and capabilities by motivating and providing effective leadership.
- Directing facilitates introduction of needed changes in the organisation. Generally, people
have a tendency to resist changes in the organisation. Effective directing through motivation, communication and leadership helps to reduce such resistance. (Any Three)
OR
Leadership is an action of leading a group of people or being a leader in an organisation who induces obedience, respect, loyalty and cooperation.
‘Leadership is the activity of influencing people to strive willingly for group objectives’. -George Terry Styles of Leadership are:
(a) Autocratic/Authoritative leadership: Under this style, all decision-making power is with the leader and he exercises complete control over his subordinates.
The leader determines the policies without consulting his/her subordinates and assign task to them without giving them any freedom. It is like ‘bossing people around’. It is a boss centered leadership, and is also called directive style of leadership.
Example:
Mr. Ram, the GM of Kamal Industries delegates the work to his staff Miss Rehea, Mr. Saurabh and Mr. Maahit, according to his discretion. Here, Mr. Ram is behaving as an autocratic leader.
(b) Democratic/Participative leadership: Under this style, leader consults with his/her subordinates in decision-making process and works out policies with the acceptance of the group. He/she encourages them to give suggestions in setting goals and implementing decisions. It is group centered leadership.
Example:
Mr. Ram realised that due to the absence of Mr. Maahit, the targets will not be met, so he discusses with his staff about meeting the deadline. Everybody decided to do overtime and complete the task. Here, Mr. Ram is behaving as a democratic leader.
Question 7.
List any three factors affecting the Working Capital requirement of a company. [3]
Answer:
The three main factors affecting working capital requirements are as follows:
(a) Nature of business: A trading business needs less amount of working capital because there is no processing of goods. On the other hand, the working capital requirement is more in case of manufacturing business where raw materials are converted into finished goods.
(b) Business cycle: At times of boom period in the market (like Diwali, Guru Parv, and Christmas etc.), the production as well as sales are likely to be higher. Whereas, the working capital requirement would be lower in times of depression in the market.
(c) Production cycle: It is the time span between the receipt of raw materials and their conversion into finished goods. Length of production cycle affects the working capital requirement. If the duration of production cycle is longer, the working capital requirements to meet day-to-day expenses would be higher and vice-versa.
Question 8.
Priya is a regional manager of XYZ. Ltd. She is a hardworking employee and is trying to reduce wastage
of resources in her company. She has set standards for performance of different activities and is ensuring that targets are met according to these standards with minimal wastage of resources. She has set up CCTV cameras which helps her to keep a close check on the activities of the subordinates and know how the employees are performing. She also rewards the employees with a bonus when these standards are met. She is trying her best to ensure a good performance of her team this year through the application of an important function of management. Explain any two benefits of the function of management highlighted above. [3]
Answer:
Priya is trying her best to ensure a good performance of her team this year through the application of “Controlling” function of management.
Importance of Controlling are:
(a) Accomplishing organisational goals: The controlling function measures progress towards the organisational goals and brings to light the deviations, if any, and indicates corrective action.
(b) Improving employee motivation: In an organisation employees are also aware that their performance is judged using some set of standards. Periodic and systematic evaluation of the employee performance and accordingly rewarding the deserving employees in the form of bonus, increment or promotion leads to the employees getting more motivated in order to perform for the organisation.
Question 9.
Enumerate any five rights of a consumer under the Consumer Protection Act, 2019.
OR
Enumerate any five responsibilities of a Consumer Protection Act, 2019. [5]
Answer:
Five rights of Consumer are as follows:
- Right to Safety: Consumers have the right to be safeguarded against items and services which are harmful to their health and well-being. The consumers should buy quality or standardised products and services.
- Right to be Informed: Before purchasing a product, the consumer has the right to get complete information about the quality, quantity, ingredients, purity, price etc. of the product and service.
- Right to Choose: Consumers have the right to choose any product from the available options based on their own preferences. No seller can influence the consumer to buy certain product through unacceptable means.
- Right to Seek Redressal: If a product or service fails to meet the consumer’s expectations or is dangerous for consumer then in that case the consumer has the right to seek redressal.
- Right to Consumer Education: Consumers have the right to learn and be well-informed throughout their lives. He should be informed of his rights and remedies in the event that the goods or service does not meet his expectations.
OR
Five consumer responsibilities are as follows:
- Be aware: Be knowledgeable about the numerous items available in the market so that an intelligent and wise choice can be made.
- Standardised products: Purchase just standardised products to ensure quality. Look for the ISI mark on electrical goods, the FPO label on food products, and the Hallmark on jewellery, among other things.
- Follow instructions: Follow the product’s instructions and learn about the hazards linked with it, then use it safely.
- Cautious purchasing: Carefully read labels for the information on prices, net weight, manufacturing, expiring dates, and so on.
- File a complaint in an appropriate consumer forum: In case of a shortcoming in the quality of goods purchased or services availed. Do not fail to take an action even when the amount involved is small.
Question 10.
State any five regulatory functions of the Securities and Exchange Board of India. [5]
Answer:
Regulatory functions of SEBI are:
- Registration of brokers and sub-brokers and other players in the market.
- Registration of collective investment schemes and Mutual Funds.
- Regulation of stock brokers, portfolio exchanges, underwriters and merchant bankers and the business in stock exchanges and any other securities market.’
- Calling for information by undertaking inspection, conducting enquiries and audits of stock exchanges and intermediaries.
- Performing and exercising such power under Securities Contracts (Regulation) Act 1956, as may be
delegated by the Government of India.
Question 11.
In an interview with a leading news channel, Mr. Rakesh Kwatra, CEO of ‘Get My Job” has suggested that the Companies which want more and more people to apply for jobs in their organisation should make the process of applying for jobs easier and candidate friendly. It is for this reason, he said, that most progressive companies today have a short application process. He also said that the application form filled by the candidate is very important as it is the information supplied in the application forms, which helps the manager in eliminating unqualified or unfit job seekers. The company can create a mechanism that attempts to measure certain characteristics of individuals like aptitude, manual dexterity, and intelligence to personality. The candidate may then be called for an in-depth conversation to evaluate their suitability for the job.
(a) Name the process and steps in the process of identifying and choosing the best person out of a number of prospective candidates for a job discussed above.
(b) Also explain the next three steps in the process which can be subsequently performed by the
company. [5]
Answer:
(a) The concept discussed here is Selection.
Steps in the process of selection discussed below:
(i) Preliminary Screening: Preliminary screening helps the manager eliminate unqualified or unfit job seekers based on the information supplied in the application forms.
“He also said that the application form filled by the candidate is very important as it is the information supplied in the application forms, which helps the manager in eliminating unqualified or unfit job seekers.”
(ii) Selection Tests: An employment test is a mechanism (either a paper and pencil test or an exercise) that attempts to measure certain characteristics of individuals who have applied for job.
“The company can create a mechanism that attempts to measure certain characteristics of individuals like aptitude, manual dexterity, and intelligence to personality.”
(iii) Employment interview: Interview is a formal, in-depth conversation conducted to evaluate the applicant’s suitability for the job.
“The candidate may then be called for an in-depth conversation to evaluate their suitability for the job.”
(b) Next three steps are as follows:
(i) Reference and background checks: Many employers request names, addresses and telephone numbers of references for the purpose of verifying information and gaining additional information on an applicant. Previous employers, known persons, teachers and university professors can act as references.
(ii) Selection Decision: The final decision has to be made from among the candidates who passed the tests, interviews and reference checks. The views of the concerned manager will be generally considered in the final selection.
(iii) Medical Examination: After the selection decision and before the job offer is made, the candidate is required to undergo a medical fitness test. The job offer is given to the candidate being declared fit after the medical examination.
Question 12.
Vansh Limited is a large and reputed company which manufactures ventilators. After the outbreak of ‘COVID-19’ in 2020 the company witnessed an increase in revenue by 40%. It has plans to further increase its production capacity and also start production of PPE kits, sanitisers and masks in 2022. The Finance manager of the Company Mr. Rajiv feels confident about the future of the company and its liquidity position. Discuss the meaning of Dividend Decision and in the light of the above statement explain any two factors which should be considered by ‘Vansh Limited’ while formulating the dividend policy of the company.
OR
Vedansh Limited has a share capital of ₹10,00,000 divided into shares of ₹100 each. For expansion purpose, the company requires additional funds of ₹ 5,00,000. The management is considering the following alternatives for raising funds:
Alternative 1: Issue of 5000 Equity shares of ₹100 each
Alternative 2: Issue of 10% Debentures of ₹ 5,00,000
The company’s present Earnings Before Interest and Tax (EBIT) is ₹ 4,00,000 p.a. Assuming that the rate of Return of Investment remains the same after expansion, which alternative should be used by the company in order to maximise the returns to the equity shareholders. The Tax rate is 50%. Show the working. [5]
Answer:
Dividend decision: Dividend is that part of profit which has to be distributed among the shareholders of a company. In this decision, it is being decided that whether
(a) Whole profit is to be dispersed,
(b) All earnings should be retained in the business, or
(c) A portion of profits will be retained in the business and the rest of the profit should be distributed among shareholders.
Factors affecting dividend decision:
(a) Amount of earning: Dividend represents the share of profits distributed amongst shareholders. A firm pays dividends out of its current and past earnings. A company having higher earnings will be in a position to pay a higher amount of dividend to its shareholders. In contrast to this, a company having low or limited earnings would distribute low dividends.
(b) Stability earnings: A company with stable earnings is not only in a position to declare higher dividend but also maintain the rate of dividend in the long run.
OR
Vedansh Limited’
| SOURCES | Plan 1 | Plan 2 |
| EBIT | 6,00,000 | 6,00,000 |
| Less dnterest | – | 50,000 |
| EBT (Earnings Before Tax) | 6,00,000 | 5,50,000 |
| Less: Tax (50%) | 3,00,000 | 2,75,000 |
| EAT (Earnings After Tax) | 3,00,000 | 2,75,000 |
| Number of Shares | 15,000 | 10,000 |
| EPS = (EAT/No. of Shares) | (3,00,000/15,000) = 20 | (2,75,000/10,000) = 27.5 |
According to calculations, Vedansh Limited should go for second alternative that is Issue of 10% Debentures of ₹ 5,00,000
Working Notes:
Rate of Return of Investment is 4,00,000/10,00,000 × 100 = 40%
EBIT after expansion = 40% × 15,00,000
= 6,00,000