CBSE Sample Papers for Class 12 Business Studies Paper 5

CBSE Sample Papers for Class 12 Business Studies Paper 5 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 5.

CBSE Sample Papers for Class 12 Business Studies Paper 5

Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme as prescribed by the CBSE is given here. Paper 5 of Solved CBSE Sample Papers for Class 12 Business Studies is given below with free PDF download solutions.

Time: 3 Hours
Maximum Marks: 80

General Instructions

(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may have about 50 to 75 words.
(iii) Answer to questions carrying 4 – 5 marks may have about 150 words.
(iv) Answer to questions carrying 6 marks may have about 200 words.
(v) Attempt all the parts of a question together.

Questions

Question 1:
On the introduction of Goods and Services Tax Act, experts in the field of business started analysing and forecasting its impact on various sectors and industries. Vivek, an established businessman, attended a few seminars and conferences organised by such experts to familiarize.himself with this information. He wanted to use these forecasts to reduce the uncertainty in making decisions for the future in his business.
Name the step in the planning process that is being discussed in the above paragraph.

Question 2:
How do the principles of management help managers in meeting the requirements of the changing environment ? State.

Question 3:
Beena, a student of management, likes to relate what she learnt in class to real life situations. She observed many situations while watching educational programmes on television that remind her of concepts of Scientific Management. In one such programme, factories manufacturing parts for products like automobiles, computers and mobile phones were being telecast.
Name the technique of Scientific Management that should be adhered to, while manufacturing parts for such products.

Question 4:
Name the style of leadership under which the leader gives complete freedom for group or individual decision and acts as information supplier when asked.

Question 5:
Ravi, the Marketing Manager of Weaver Garments Ltd. does not allow the salesman working under him to freely express their frank opinion and feelings regarding work related matters.
Identify the organisational barrier to communication that has been created by Ravi.

Question 6:
‘Ganesh Steel Ltd/ is a large and credit-worthy company manufacturing steel for the Indian market. It now wants to cater to the Asian market and decides to invest in new hi-tech machines. Since the investment is large, it requires long-term finance. It decides to raise funds by issuing equity shares. The issue of equity shares involves huge floatation cost. To meet the expenses of floatation cost the company decides to tap the money-market.
Name the money-market instrument the company can use for the above purpose.

Question 7:
Meenakshi Chemicals Ltd. of Noida needs a special kind of raw material which is imported from Germany. The time gap between placing of the order and delivery is about three months. How will this affect the working capital requirement of Meenakshi Chemicals Ltd. ?

Question 8:
Avik is the finance manager of Mars Ltd. In the current year, the company earned high profit. However, Avik thinks that it is better to declare smaller dividend as he is unsure about the earning potential of the company in the coming years. Avik’s choice of dividend decision is based on which of the factor that affect it ?

Question 9:
After completing her studies in product design, Sarita wishes to start her own business to design products to cater to the mobility and communication requirements of persons with special needs. She told her friend that she wanted to focus on supplying high quality products at affordable prices. The Unique Selling Proposition (USP) of the products would be sensitivity to the challenges and needs of the differently abled people.
She wants to employ only differently abled persons in her factory and sales offices across the country. This decision of Sarita provides the base for interpreting her strategy. This also defines the broad parameters within which the company may recruit the persons. Sarita has also to decide about the exact manner and the chronological order of how the selection of the differently abled applicants will be done.
In the above lines, Sarita is discussing about one of the functions of management. This function has several types. Identify and explain the types Sarita is discussing in the above lines.

Question 10:
“External sources of recruitment are considered better than internal sources.” Give any three arguments in support of this statement.

Question 11:
Describe briefly the following methods of training :

1. Apprenticeship Training; and
2.  Internship Training.

Question 12:
Differentiate between capital market and money market on following basis :

1.  Participants,
2.  Instruments,
3. Duration.

Question 13:
Pinnacle Ltd. deals in the sale of stationery and office furniture. They source the finished products from reputed brands who give them four to six months credit. Seeing the demand for electronic items, they are also planning to market these items by opening outlets throughout India. For this, they have decided to join hands with a Japanese electronic goods manufacturer.
Identify and state any two factors that would affect the fixed capital requirement of Pinnacle Ltd. as discussed above.

Question 14:
Name the type of organisation which is deliberately designed to facilitate the smooth functioning and to produce stability to the organisation. State any three advantages of such organisation.

Question 15:
The last step in the process of controlling is ‘taking corrective actions’. Briefly explain the steps in chronological order that are taken in the process of controlling before this step.

Question 16:
Sadaf is the Chief Executive Officer of a reputed company. She introduced appropriate skill development programmes and a sound promotion policy for the employees of her company. To motivate and retain the best talent in the company, she designed the jobs of the managers to include greater variety of work content. Identify and explain the two incentives introduced by Sadaf to motivate the employees of her company.

Question 17:
Mr. Murthy is the Human Resource Manager of Jai Hind Hospital in Vellore. He has to appoint nurses for the hospital. Since patients in the hospital are of different types, he wants to find out the candidates’ maturity and emotions in dealing with the patients. He also wants to know about the candidates’ ability to take decisions. Explain two types of tests that Mr. Murthy can use to meet his requirements.

Question 18:
Sindhu Ayurved Ltd., a new and leading manufacturer of herbal and ayurvedic medicines and grocery products has captured a large share of the market in a short span of time. The Research and Development (R&D) department of the company spends considerable time and effort in developing eco-friendly, chemical free and healthy alternatives for a variety of products of daily use, like toothpaste, biscuits, noodles, soaps, shampoos and detergents, etc. Their business orientation differs from competitors who are short sighted and serve only consumer’s needs. Instead Sindhu Ayurved Ltd. considers larger issues of long-term social welfare, paying attention to social, ethical and ecological aspects of marketing.

1. Identify and explain the marketing management philosophy adopted by Sindhu Ayurved Ltd.
2.  State any two other marketing management philosophy.

Question 19:
What is meant by demonetisation ? Explain any three impacts of demonetisation on business and industry in India.

Question 20:
Hema is one of the most successful managers of her company, ‘Kobe Ltd.’ She uses her creativity and initiative in handling challenging situations at work. The knowledge gained by her during her student days at a renowned management institute as well as through her observation and experience over the years is applied by Hema in a skillful manner in the context of the realities of a given situation. She often reads books and other literature in various fields of management to keep her knowledge updated.

1. An aspect of the nature of management is being highlighted in the above description. Identify the aspect and define it.
2. Explain any three features of the aspect identified in part

Question 21:
Apaar Foundation is a Non Governmental Organisation (NGO) working to improve the lives of children with medical needs, the homeless and victims of natural disasters. Apart from donations in cash, they collect dry ration, old clothes, shoes, toys, books and medicines from donors. At Apaar Foundation’s office in Bhopal the material collected is segregated, classified and put in shelves and boxes that are labelled systematically. There is a specific place for each of these items and volunteers put everything at their respective places.
The volunteer work is divided into specific jobs like fund raising, field visits, social media updates and so on. Each volunteer is part of a particular team, depending on their competency and training. Each volunteer becomes specialised in their respective field, leading to efficient utilisation of human effort.
Identify and explain two principles of management adopted by Apaar Foundation.

Question 22:
Shyam bought a pain relieving ointment after seeing it being displayed in the chemist’s shop. The ointment tube was packed in a carboard box. Identify the different levels of packaging of the pain relieving medicine, when it was purchased by Shyam. Also state the functions of packaging.

Question 23:
“Delegation is the entrustment of responsibility and authority to another and the creation of accountability for performance.” Explain three elements of delegation in the light of this statement.

Question 24:
Sudha is an enterprising business woman who has been running a poultry farm for the past ten years. She has saved ? 4 lakhs from her business. She shared with her family her desire to utilise this money to expand her business. Her family members gave her different suggestions like buying new machinery to replace the existing one, acquiring altogether new equipments with latest technology, opening a new branch of the poultry farm in another city and so on.
Since these decisions are crucial for her business, involve a huge amount of money and are irreversible except at a huge cost, Sudha wants to analyse all aspects of the decisions, before taking any final decision.

1. Identify and explain the financial decision to be taken by Sudha.
2. Also, explain briefly the factors that will affect this decision.

Question 25:
State any two reliefs that the consumer court can grant to consumers in case of genuine complaints in each of the following situations :

1. Divya was charged more than the printed maximum retail price (MRP) for a bottle of water.
2. Clara was sold a car with a defective engine.
3.  Antony suffered injury while using newly bought defective electric heater.

Answers

Answer 1:
Developing planning premises.

Answer 2:
The principles of management help managers in meeting the requirements of the changing environment as the principles of management are flexible and can be modified in the light of given situation.

Answer 3:
Standardisation and simplification.

Answer 4:
Laissez-faire leadership.

Answer 5:
Status.

Answer 6:
Commercial Paper.

Answer 7:
Meenakshi Chemicals Ltd. will require more working capital because time gap between placement of order and delivery is very high.

Answer 8:
Stability of Dividend.

Answer 9:
The function of management discussed in the above para is planning.
Following are two types of plans being discussed by Sarita :

1. Policy – Policy is a type of plan which is in the form of general statement that guides thinking towards a particular direction and helps in solving routine problems.
2.  Procedure – A procedure is a type of plan which specifies the various steps to be taken in chronological order in performing an activity in order to achieve an objective.

Answer 10:
External sources of recruitment are considered better than internal sources due to following merits of external sources :

1.  Qualified personnel – External sources of recruitment attract qualified and trained people to apply for vacant jobs in the organisation.
2.  Wider choice – When an organisation adopts external sources of recruitment, it gets an opportunity to make selection among the large number of candidates. Thus, management has a wider choice.
3.  Fresh talent – When vacancies are advertised widely, a large number of applicants from outside the organisation apply. As a result, organisation gets fresh talents and new blood available outside the organisation.
4. Competitive spirit – When an organisation uses external sources of recruitment, existing employees will have to compete with the outsiders. This promotes competitive spirit in the organisation.

Answer 11:

1. Apprenticeship Training – Apprenticeship training is one of the on-the-job training methods. Under this method, trainees become apprentices in the organisation and get intensive job instructions for a prescribed period of time to become qualified for the job. During the apprenticeship period, a trainee is paid less than a fully qualified worker.
2. Internship Training – Internship training refers to a joint programme of training in which technical institutes and business enterprises cooperate to train the students. It is virtually a practical training of the theoretical knowledge. Generally, training is a part of course of study of the student. During the period of training, no salary is given but a stipend is given to the trainees.

Answer 12:
Following table shows distinction between capital market and money market:

Answer 13:
Following are the factors that would affect fixed capital requirement of Pinnacle Ltd. :

1. Diversification – If the company decides to diversify its existing business activities, it will require higher investment in fixed assets.
2. Level of collaboration – If some business organisations share each other’s facilities, these organisations will require lesser fixed capital. If there is no collaboration, an organisation will require more fixed capital to run its business smoothly.

Answer 14:
Formal organisation is the type of organisation which is deliberately designed to facilitate the smooth functioning of the organisation.
Advantages of formal organisation are as under :

1. Stability – Formal organisation is stable because behaviour of employees is within the parameter of specific rules. The behaviour of the employees can be fairly predicted.
2.  Fixation of responsibility – There is clearcut role of each member and mutual relationships are clearly defined. Hence, it is easier to fix responsibility.
3.  Clear cut role – Formal organisation specifies clearly the rights, duties and liabilities of an employee. Hence, there is no ambiguity in the role that each member has to play. Further, the chances of duplication of efforts are minimum.
4. Unity of command – Formal organisation is based on the principle of scalar chain. Scalar chain provides official lines of command. As a result, there is unity of command which means that an employee receives instructions and orders from one superior only and he is answerable to same superior.

Answer 15:
The various steps taken in the process of controlling before taking corrective actions are as follows:

1.  Establishment of standards – Standards represent desired performance. They state clearly as to what must be achieved during a specific period. To be useful, standards must be set in measurable terms.
2. Measurement of performance – The actual performance of employees is measured and expressed in the same units as the planned targets or standards either through direct personal observation or through regular oral/written reports. Managers generally prefer periodic measurement of performance.
3. Comparison of actual performance with the standard – Comparison of actual performance with the standard is undertaken to find out the extent of deviations.
4. Analyzing deviations – After ascertaining the deviation between actual results and targeted (standard) results, the next step is to identify the causes thereof. The deviations and causes are then reported so that corrective action may be taken at appropriate level.

Answer 16:
Following are the incentives introduced by Sadaf to motivate the employees of her company:

Career advancement opportunities – Every individual wants to grow to the higher level in the organisation. Managers should provide opportunity to employees to improve their skills and be promoted to the higher level jobs. Appropriate skill development programmes, and sound promotion policy will help employees to achieve promotions. Promotion creates a positive impact on the self¬confidence and performance of the employees.

Answer 17:
Following are the tests that Mr Murthy can use to meet his requirements :

1. Intelligence test – An intelligence test is a test which is used to judge the level of intelligence quotient of an applicant i.e., mental capacity. An intelligence test measures the applicant’s ability to understand the instructions, to access the learning ability and to make decisions and judgments.
2. Personality test – A personality test is a test which is used to measure the person’s overall personality and qualities. Personality test measures applicant’s value system, his emotional reactions, maturity etc.

Answer 18:
(a) Societal marketing concept has been adopted by Sindhu Ayurved Ltd. Societal marketing
concept emphasises social welfare along with the interests of the firm and its customers. This concept includes social implications in the decision-making. According to this concept, firms should consider the welfare of the society as well as consumer satisfaction.
Following are the features of societal marketing concept:

1. It starts from market and society.
2. Its main focus is society’s well-being.
3. It is based on profit through customer satisfaction and social welfare.

(b) (1) Production concept.
(2 Product concept.

Answer 19:
Demonetisation means discontinuity of the particular currency from circulation and replacing it with a new currency.
Following are the impacts of demonetisation on business and industry in India :

1. Digital transactions – The government succeeded in encouraging people to use digital means for making transactions. According to an estimate, Indian economy has witnessed close to 20% decline in currency in circulation.
2. Disruption of trade – Demonetisation created cash crunch due to inadequate supply of new notes. As a result, small businesses suffered financial losses. The situation was worse in rural areas due to lack of enough number of banks.
3. Decline in foreign investment – Demonetisation created insecurity in foreign investors to invest in Indian economy. Demonetisation created threat in the mind of Indian and foreign tourists which affected tourism. It resulted in adverse impact on GDP.

Answer 20:

1.  In the above case, management as an art is being highlighted.
   An art refers to the application of knowledge and personal skills to achieve desired results. Management as an art means the application of principles of management and personal skills of managers.
2. Following are the features of management as an art:
   • Situational – Management has to deal with the human beings who behave differently in different situations. It is not possible to develop a set pattern for the given situation.
   • Personalized approach – The application of management principles depends on the experience and personal skill of managers. Every manager has his individual approach and technique in solving problems.
   • Continuous practice – One becomes an efficient manager through practice over time. Every manager applies the principles of management differently on how he has practised these and how much creative he is. Like any other art, management is also creative.

Answer 21:
Following are two principles of management adopted by Apaar Foundation :

(i) Principle of order – Principle of order suggests that objects and the people should be properly arranged in an order. A certain place should be specifically marked for each object and each individual. For example, production manager maybe allotted an office room in the factory and a typist would be allotted a particular table and a typing machine. Thus, there are two aspects to order:

• Material order i.e., arrangement of things.
• Social order i.e., arrangement of people.

The object of this principle is to avoid the loss of time and material and to ensure smooth functioning.
The application of this principle helps to reduce chaos and to increase efficiency of the employees.

(ii) principle of division of work – Principle of division of work suggests that work of all kinds should be divided into compact jobs and each job should be allocated to different individuals as per their competence, qualification and experience. The object of this principle to produce more and better work for the same effort. The application of this principle makes each task simple and helps in ensuring speed, accuracy and specialisation.

Answer 22:
Following are different levels of packaging of the pain relieving medicine :
(a) Primary packaging : Ointment tube.
(b) Secondary packaging : Cardboard box.
Following are the functions of packaging :

1. Promotion – Attractive packaging induces the customers to purchase the product. Packaging acts as a silent salesman particularly in self-service stores. Packaging is the best advertising medium to boost product image.
2. Protection – Packaging safeguards the product from any kind of damage during transportation and warehousing. Package protects the quality of inner contents from adverse weather conditions.
3.  Identification – Packaging creates individuality and helps quick identification. The product gains special and separate existence due to packaging.
4.  Use – Packaging greatly helps in the use of the product. The size and shape of the package is designed in such a manner that it is convenient to open, handle and use for the consumers.

Answer 23:
“Delegation of authority” simply refers to an act of entrusting the subordinates with all powers that are of the superior authority i.e., granting of authority by superior to subordinate. It is based on the elementary principle of division of work by which a superior spreads his area of managerial influence. In short, delegation of authority means assigning work to others and giving them authority to do.
Following are the steps or elements contained in the process of delegation :

1. Responsibility – Responsibility refers to the work assigned to a person, position or job. Responsibility involves all these mental and physical activities which need to be performed to carry out a given assignment or duty. Responsibility arises from the superior-subordinate relationship. Since responsibility defines the work to be carried out by subordinates, it cannot be delegated. Responsibility flows upwards i.e., from bottom to top.
2. Authority – Authority means power or right to command. Authority refers to the sum of powers and rights to use resources as well as the right to decide, act or not to act. Authority is needed to perform a given responsibility. Authority must reflect responsibility. Authority arises because of a formal position in the organisation. Authority can be delegated to the subordinates. Authority flows downwards i.e., from top to bottom.
3.  Accountability – Accountability means the obligation to carry out the assigned tasks, duties or responsibilities. Accountability cannot be delegated. A person is accountable only for that responsibility which is delegated to him.

Once authority is delegated and responsibility is accepted, a subordinate cannot deny accountability. Accountability flows upwards. The process of delegation is incomplete unless accountability is created.

Answer 24:
(a) The financial decision to be taken by Sudha is investment decision/capital budgeting decision.
Investment or capital budgeting decision refers to a decision as to how firm’s funds are invested in viable and profitable project i.e., long-term assets. For example, a decision to invest in plant and machinery. Investment decision requires evaluation of new investment proposals and selection of the best option on the basis of risk and return. This decision normally involves huge outflow of funds and is irreversible except at a huge cost. Hence, such a decision must be taken with utmost care.
(b) Following are the factors affecting capital budgeting decision :

1. Cash flows of the project – The financial manager should carefully analyse the amount of cash flows i.e., cash receipts and payments over the life of investment before considering a capital budgeting decision.
2. rate of return – The financial manager should calculate the expected returns from each proposal and risk involved.
3. Investment criteria – The financial manager should evaluate investment proposals by applying capital budgeting techniques. These techniques involve a number of calculations regarding the amount of investment, interest rate, cash flows and rate of return.

Answer 25:
(i) Since Divya was charged more than the printed maximum retail price (MRP) for a
bottle of water, the consumer court may grant following reliefs to her :

•  Refund of the price – The consumer court may order the seller of bottle of water to refund the price paid by Divya.
• Discontinuance – The consumer court may order the seller of bottle of water to discontinue such unfair practice and not to repeat it in future.

(ii) Since Clara was sold a car with a defective engine, the consumer court may grant following reliefs to Clara :

• Removal of defect – The consumer court may order removal of the defect from the engine.
• Replacement – The consumer court may order for the replacement of car.

(iii) Since Antony suffered injury while using newly bought heater, the consumer court may grant following reliefs to Antony :

•  Compensation – The consumer court may order the seller or manufacturer of electric heater to compensate for injury suffered by Antony.
• Replacement – The consumer court may order the seller of electric heater to replace the electric heater.

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