DELHI PUBLIC SCHOOL, MARUTI KUNJ/DLF CITY

PRE-BOARD I EXAMINATION
2020-21

SUBJECT: BUSINESS STUDIES DATE: 23/12/2020

CLASS: XII MM: 80
TIME: 3 Hrs.
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General instructions:

1 This question paper contains 34 questions.

2. Marks are indicated against each question.
3. Answer should be brief and to the point.
4. Answers to the questions carrying 3 marks may be from 50 to 75 worlds.
5. Answers to the questions carrying 4 marks may be about 150 worlds.
6. Answers to the questions carrying 6 marks may be about 200 worlds.
7. Attempt all parts of the questions together.
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1. Ronit Raj, a marketing manager is a patient of diabetes for which he takes medicines
regularly. One day, on his tour to Patna, he met with an accident and was hospitalised. Due to
doctors‟ negligence, a delicate nerve of his right leg was cut rendering hum crippled throughout
his life. Point out the consumer right that has been violated by the doctors under the Consumer
Protection Act, 1986 in the above situation. 1
2.______________gives shape to the organisation structure.
a) Extent of delegation; b) Span of Management;
c) No of employees; d) Planning 1
3. An important project at AMB consultants is running behind schedule by a month. This has
upset their clients and might affect the reputation of the company in the long run. No managerial
action like assigning more workers, equipment or giving overtime has been able to solve the
problem. What managerial action may now be taken by the company to avoid such a situation
from arising in the future?
A. Revise the schedule; B. Assigning additional workers and equipment to the project;
C. Get permission for further overtime work; D. Both B&C. 1

4.____________ is the deliberate action of an organisation for promoting goodwill between itself
and the society.
(a) Marketing mix
(b) Advertising
(c) Public relations
(d) Selling 1

5. Which of the following statements highlights that management is a group activity?

(a) Organisation is a collection of diverse individuals with different needs.
(b) Achievement of common goal requires teamwork and co-ordination of efforts in a common
direction.
(c) Each member of the organisation may have different individual goals but they must travel
together towards common goals.
(d) All of the above 1

6. Which one of the following is not a financial incentive?

(a) Bonus
(b) Provident Fund
(c) Co-partnership
(d) Challenging job 1

7. Twinkle Stars’ is a well-known resort for organising parties, especially for children. However,
in past 6 months its popularity has reduced considerably as a new resort with better ambience
and facilities has opened within its vicinity. Name the related feature of business environment
which has influenced the business of ‘Twinkle Stars’ adversely.
(a) Totality of external forces (b) Dynamic nature
(c) Interrelatedness (d) Uncertainty 1

8. During the year 2018, Halla Walla Limited made surplus profits due to growing reputation of
the business as a result of sincerity of its employees. In order to give due recognition to its
employees and motivate them to continue with the good work, the company decided to give a
certain percentage of profits to them. Identify the type of financial incentive being adopted by the
company.
(a) Perquisites
(b) Productivity linked wage incentives
(c) Co-partnership
(d) Profit sharing 1

9. India continues to be a lower-middle-income country along with 46 others, while Sri Lanka
has climbed to the upper-middle-income group for the fiscal year (FY) 2020, according to the
World Bank’s classification of countries by income levels, released on July 1, 2019.
Identify the related dimensions of business environment.
(a) Social dimension (b) Technological dimension
(c) Economic dimension (d) Political dimension 1

10.  Identify the correct sequence of steps involved in the planning process.

(a) Evaluating alternative courses, Identifying alternative course of actions, Setting objectives,
Developing premises
(b) Setting objectives, Identifying alternative course of actions, Evaluating alternative courses,
Developing premises
(c) Setting objectives, Developing premises, Identifying alternative course of actions, Evaluating
alternative courses
(d) Setting objectives, Identifying alternative course of actions, Developing premises, Evaluating
alternative courses 1

11. It is defined as the framework within which managerial and operating tasks are performed.
(a) Span of management (b) Organisational structure
(c) Informal organization (d) None of the above 1

12. Deviations are said to be positive in nature when

(a) Planned performance is more than the actual performance

(b) Actual performance is more than the planned performance
(c) Both planned and actual performances are same
(d) None of the above 1

13.  Guneet went to a shop and expressed her desire to buy a copper water bottle only of Prestige
company. Identify the component related to branding being described in the above case.
(a) Trademark (b) Generic name
(c) Brand name (d) Brand mark 1

14. Which one of the following is not a function of financial market?

(a) Mobilisation of savings (b) Price determination of securities
(c) Floating of companies (d) Lowering transaction cost 1
15. Which one of the following is a money market instrument?
(a) Unit of mutual fund (b) Debenture
(c) Bond (d) Treasury bill 1
16. Which of the following statements is not true with regard to Commercial paper?

(a) Is a long-term unsecured promissory note with a fixed maturity period.

(b) It usually has a maturity period of 15 days to one year.

(c) It is sold at a discount and redeemed at par.
(d) Companies use this instrument for bridge financing. 1

17. Which of the following statements is true with regard to financial markets?
(a) They link the households which save funds and business firms which invest these funds.
(b) They work as an intermediary between the savers and the investors by mobilising funds
between them.
(c) They allocate funds available for investment into their most productive investment
opportunity.
(d) All of the above 1
Read the following text and answer question No.18-20 on the basis of the same:

After doing a diploma in entrepreneurship, Farihad started his own confectionary business. He
started doing a lot of hard work and used the recipes taught by his grandmother in various
preparations. He also learnt many recipes from online sites and television programmes. He
decided to keep the price of the products low initially and also informed his customers about the
goodness of the items sold by them. However, he didn’t mention on the package of each item
weather it contained eggs or not. As a result, vegetarian people became hesitant in buying things
from his shop as they had to verbally inquire from him about the inclusion of eggs in the
preparation of various items.
In the context of the above case:

18. ___________ is the important aspect related to the marketing of products which has been
ignored by Farihad. 1
19. ____________ and __________ are the two functions performed by the aspect as identified
in part (a). 1
20. ____________ is the right of consumer being violated by Farihad.  1
21. Sirajuddin purchased a car for rupees 15 lacs from an automobile company & found that its
airbags were defective. After many complaints with the company that went unheard, he filed a
case in the District Forum. He was not satisfied with the orders of the District Forum. He then
appealed before the State Commission & on being dissatisfied with the orders of State
Commission, he appealed before the National Commission. Sirajuddin was not satisfied with the
orders of National Commission. Give him the highest authority where he could appeal against
the decision of the National Commission and write about any two reliefs which he may be
granted by the concerned authority to him . 3
22. Mega Ltd was manufacturing water-heaters. In the first year of its operations, the revenue
earned by the company was just sufficient to meet its costs. To increase the revenue, the
company analysed the reasons of less revenues. After analysis the company decided
(i) To reduce the labour cost by shifting the manufacturing unit to a backward area where labour
was available at a very low rate.
(ii) To start manufacturing solar water-heaters and reduce the production of electric water-
heaters slowly.
This will not only help in covering the risks, but also help in meeting other objectives too.
Identify and explain the objectives of management discussed above. 3

23. Explain the following as factors affecting dividend decision

i. Stability of earnings
ii. Growth opportunities
iii. Cash flow position 3
24. ‘Saurashtra’ is a company involved in the export of indigenous food products like chutneys
and pickles. It has tied up with the small farmers in various states for sourcing of fruits and
vegetables. In this way it helps the small farmers to sell their produce at reasonable rates. The
company follows a practice where only significant deviations from a budget or plan are brought
to the attention of management. The degree of deviations allowed in different categories in the
budget are well defined in advance, along with the appropriate levels of management who will
respond to the deviations in question. For example, deviation of Rs. 20,000 or more in purchase
costs will be reported to the concerned department manager.
In context of the above case:
a) Identify the principle of management control adopted by the company. State the
belief underlying this principle.
b) List any two values that the company wants to communicate to the society. 3

25. Resolutions Pvt. Ltd. is a publishing company. Its book on Business Studies for class XII is
in great demand. As a result, the employees in the marketing department are always racing
against time. The employees have to work overtime and on holidays to cater to the demand.
Managers in the marketing department are under stress as they have to handle more than two
territories. The work stress has led to dissatisfaction among the employees and managers.
a) Name and explain the step of staffing process which has not been performed properly,
b) State the next two stages immediately following the step identified in part ‘a’. 4
26. Mohit Gupta is working with Yellow Security Services Ltd. He is also recruiting security
guards for the company. The company provides security services in Delhi and Noida at short
notice to various companies. The guards are recruited on a temporary basis. The guards
provided by this company are known for their honesty and punctuality. Mohit Gupta is well-
known in his village for providing employment to unskilled people.
a) Name the source of recruitment used by Yellow Security Services Ltd.
b) State any one disadvantage of this source of recruitment.
c) Identify the need of security guards which is being fulfilled by the company as per
Maslow’s need hierarchy.
d) Identify any two values communicated to society in the above stated case. 4
27. Sandhya is a successful manager at Manisons Enterprises. She has a team of twelve people
working under her. She encourages them to set their own objectives and take decisions. She
respects their opinions and supports them, so that they can perform their duties and accomplish
organizational objective. To manage and exercise effective control she uses forces within the
group. As an intelligent manager, at times she also makes uses of positive aspects of informal
communication. This way, she is able to unify diverse interests and ensure that targets are met.
a) There are many theories and styles of influencing people’s behaviour. Identify the style
used by Sandhya which is based on the use of authority.
b) State the two Positive aspect of the communication discussed, above which Sandhya is
using as an intelligent manager. 4
28. What is meant by Capital Budgeting? State any three factors affecting fixed capital
requirement of a firm.
OR
Enumerate any four points of importance of financial planning. 4
29. Kynaa, a beauty products e-commerce company, is diversifying into men’s grooming. It is
also tapping the demand for beauty products in the fashion industry and amid professionals such
as make-up artists. As it diversifies its online presence, Kynaa is also expanding its physical
presence. They have 41 outlets across 18 cities presently and plan to expand to 180 outlets. Each
store requires a capital expenditure of 60-80 lakh rupees. The company has decided to raise
funds by issuing equity shares but not directly to the public, rather by offering them for sale
through brokers. Identify and briefly explain the method of floatation followed by the company.
Also name & explain the other methods of floatation that can be used by the company for raising
funds from the public, in the primary market.
OR

Radhika got 10, 00,000 rupees after selling her parental property which she had got as a gift from
her grandmother. Her friend advised her to invest in securities in the stock market. Radhika was
unaware of the procedure for the same. Her friend introduced her to a stock broker, who was
registered with the National Stock Exchange. Radhika approached the broker. The broker guided
her to open a DEMAT account with a Depository, as well as a Bank account. Radhika opened a
Bank account & DEMAT account with EN Bank. (a) Identify the steps in the trading procedure
for buying and selling of securities which have been discussed above. (b) State the next two steps
of the trading procedure. 4

30. Management is considered to be a ‘Three Tier Machinery’. How? 4

31. Atul joins as a Regional Sales Head in the export division of a FMCG (fast moving consumer
goods) company. In a departmental meeting, he asks one of his subordinates, Manik, to take
charge of the company’s new office in Dubai. He allocates the work to him and grants the
necessary authority. However, within a month by seeking regular feedback on the extent of
work accomplished from Manik, Atul realises that Manik is not doing the work as per his
expectations. So he takes away the authority delegated to him and re-delegates the work to
Prakrit. Due to the time wasted in this switch over, the work at the Dubai office suffers
tremendously and the company is not able to meet its desired goals.
In context of the above case:
a) Why is Manik supposed to give regular feedback about work to Atul?
b) Can the authority granted to a subordinate be taken back and re-delegated to another
person?
c) Can Manik be held responsible for not meeting the work related expectations of Atul?
Give a suitable reason in support of your answer.
d) Differentiate between authority, responsibility and accountability on the basis of origin
and flow. 6
32. Arush joins as a sales manager of a company dealing in naturotherapy products. Being
proficient in his work, he knew that without good planning he will not be able to organize, direct,
control or perform any of the other managerial functions efficiently and effectively. Only on the
basis of sales forecasting, he would assist in the preparation of the annual plans for its production
and sales. Besides, he will have to prepare sales plans regularly on weekly, monthly, quarterly
and half yearly basis. While preparing the sales forecasts, he undertakes intellectual thinking
involving foresight, visualization and issued judgement rather than wishful thinking or guess
work. Most importantly, all these planning activities will be meaningful only if they will
coincide with the purpose for which the business is being carried out.
In context of the above case, identify the various features of planning highlighted in the
above paragraph by quoting lines from it.

6
33. ‘Advertising’ and ‘Personal selling’ both are communication tools used by the marketers
to promote their products. Yet they differ in their approach. Differentiate between the
two by giving any six points.
OR
“The elements of marketing mix are popularly known as 4 P’s of marketing.” Briefly
explain these elements. 6
34. Explain 'Equity', 'Science, not rule of thumb',and 'Scalar Chain' as principles of
Management given by [Link] and Henry Fayol. 6