Indraprastha WORLD SCHOOL

Paschim Vihar, New Delhi-110063.

SESSION 2024-25
SAMPLE PAPER 6
BUSINESS STUDIES (054)
Class: XII Maximum Marks: 80
Date: Time Allowed: 3 Hours
GENERAL INSTRUCTIONS
 This Question Paper has 34 questions and 9 printed pages.
 All questions are compulsory to attempt.
 Marks are indicated against each question.
 Answers to the questions carrying 3 marks should be from 50 to 75 words.
 Answers to the questions carrying 4 marks should be about 150 words.
 Answers to the questions carrying 6 marks should be about 200 words.
 Attempt all parts of the questions together.
 Follow the prescribed word limit while answering the questions.
 Mention the correct serial number of the question and attempt the paper neatly.

1. Anmol and Ankur both did their MBA from a top B-school in India. They both joined 1
different MNC’s at managerial positions. Anmol discusses all proposals with his
subordinates, listens to their suggestions and then takes the decisions. Whereas Ankur
orders his subordinates and expects them to follow them. Both are committed and are
able to achieve their targets though their way of functioning is different.
Identify the nature of management highlighted above.
A. Management as an Art B. Management as a Science
C. Management as a Profession D. Management as a Discipline
2. Name the outcome of the function of management which includes designing of roles to 1
be filled by suitably skilled people and defining the inter relationship between roles so
that ambiguity in performance of duties can be eliminated.
A. Organization structure B. Delegation of authority
C. Decentralization D. Controlling
3. Statement I: Borrowed funds involve commitment regarding the payment of returns or 1
the repayment of capital.
Statement II: Equity is considered to be the cheapest of all the sources of funds and tax
deductibility of interest makes it still cheaper.
Choose the correct option from the following:
A. Statement I is true and Statement II is false.
B. Statement II is true and Statement I is false.
C. Both the Statements are true.
D. Both the Statements are false.

Page 1 of 9
4. Read the following statements: 1
Assertion (A) and Reason (R). Choose the correct alternative from the options given
below:
Assertion (A): Allocation function of financial markets links the savers and investors by

mobilizing the funds between them.

Reason (R): Allocation function helps the households to get a good rate of return and
scarce resources are allocated to those firms which have the highest
productivity for the economy.
A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct
explanation of Assertion (A).
C. Assertion (A) is true, but Reason (R) is false.
D. Assertion (A) is false, but Reason (R) is true.
5. After passing his secondary school examination, David left the school at the age of 15 1
years and started getting training under his father. His father, a renowned electrician, had
worked for many companies. He everyday started accompanying his father on work and
watched him carefully while working. David was a good learner and learnt the
techniques of work quickly. Now his father started passing on the tricks of the trade to
David. With the passage of time David acquired a high-level skill and became a well-
known electrician at Indore. Big business-houses started calling him for electrical -
wiring.
Identify the method of training discussed in the above para.
A. Apprenticeship Training B. Induction Training
C. Internship Training D. Vestibule Training
6. Goodwill Enterprises is a large-scale automobile manufacturer, who fulfills the needs of 1
both industrial users and consumers. The company is providing easy finance facilities at
a low rate of interest, which has considerably increased the demand for the product. The
company has installed a new branch management software to efficiently manage and
coordinate activities across their multiple branches and locations.
Identify the components of the business environment from the above case study.
A. Political and economic environment
B. Economic and social environment
C. Technological and legal environment
D. Economic and technological environment
7. ‘Puranjay’ is a company involved in the export of indigenous food products like 1
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 degrees of deviations

Page 2 of 9
 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, a
deviation of Rs.20,000 or more in purchase costs will be reported to the concerned
department manager.
Identify the principle of management control adopted by the company.
A. Critical Point Control B. Management by exception
C. Management by Control D. Division of work
8. Read the following statements: 1
Assertion (A) and Reason (R). Choose the correct alternative from the options given
below:
Assertion (A): Controlling is the last function of management
Reason(R): Controlling brings the management cycle back to Planning stage.
A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct
explanation of Assertion (A).
C. Assertion (A) is true, but Reason (R) is false.
D. Assertion (A) is false, but Reason (R) is true.
9. M/s Beta Ltd. deals in consumer goods. It employs 100 workers and 10 operative 1
managers who give guidance and support to the workers while operating the machinery.
The company has a policy of granting leave as per the requirement of the workers.
Workers are generally granted leave on festivals and special occasions. Recently on Puja
festival, it received a big order. Workers are keen to take Puja holidays while
management is pressing hard for overtime. This matter was placed before the Personnel
Manager who called the meeting of operative managers and workers to inform them
about the changes in the incentive plan which states payment of double wages for
working overtime and triple wages for working on holidays. Workers without any
pressure voluntarily took limited holidays and were able to increase their earning by
working overtime and on holidays. During Board of Directors meeting, Personnel
Manager was asked to update the management for achieving higher output, meeting
timely supplies without any confrontation with workers. Personnel Manager replied, “I
just used a carrot with no sticks approach”.
Identify the element of Directing highlighted in the above para.
A. Motivation and Leadership B. Leadership and Supervision
C. Motivation and Supervision D. Leadership and Communication
10 ‘Ramesh has received an award for the most talented manager. He has helped the 1
starting of various halted projects by guiding his subordinates and removing their doubts
through proper directing. This has helped the workers to achieve their targets on time.’
Identify the importance of Directing highlighted in the above lines.
A. Guides employees B. Integrates employees’ efforts
C. Initiates action D. Provides stability and balance to the organization.

11. The Board of Directors of Medex Pharma Ltd. decided to issue debentures worth Rs 40 1
Lakhs in order to finance a major Research and Development project. This would
Page 3 of 9
 increase the Debt Equity ratio from 1:1 to 2:1. However, at the same time it would
increase the earnings per share.

The reason that will justify the above situation is:

A. Unfavourable financial leverage, as the financial risk will be higher.
B. Unfavourable financial leverage, as the return on investment is lower than the cost of
debt.
C. Favourable financial leverage as debt is easily available.
D. Favourable financial leverage, as the return on investment is higher than the cost of
debt.
12. A bottle of moisturizer mentions ‘Buy two and get one free’. The product related 1
decision involved is:
A. Branding B. Product quality
C. Packaging D. Labelling
13. Airlines will be able to offer the benefit of lower pricing to customers on sectors/routes 1
due to the decision of the civil aviation ministry to remove price caps from August 31,
2022. This can help an airline to do better performance if they take early decisions
regarding future courses of action after understanding and doing analysis.
Which of the following importance of business environment is not highlighted in the
above case?
A. It helps in improving performance
B. It helps in assisting in planning and policy formulation
C. It helps in tapping useful resources
D. It enables a firm to identify opportunities and get first mover advantage.
14. Shudh Hava Ltd.’ is engaged in manufacturing of air conditioners and desert coolers. 1
The company offers a wide range of products to meet the requirements of people from
varied income groups. Recently the company has developed a new product, an air
purifier that improves the quality of air by filtering out all allergens and microbes. The
company introduced the product on two variants namely ‘Nano Tech' and 'Nano Tech
Premium'. In order to persuade people to buy the product it is offering easy payment
options in equal monthly installments for different time periods. Moreover, every buyer
will be offered `scratch a card' option to win instant gifts like decorative items, T-shirts
etc. The company is also planning to organise competitive events based on skill and luck
in various malls in different cities.
Identify the type of promotion strategy' adopted by the company to boost the sales of air
purifiers.
A. Advertisement B. Sales Promotion
C. Public Relations D. Personal Selling

15. Hina Sweets is a renowned name for quality sweets since 1935. Harsh the owner of Hina 1
Sweets was worried as the sales had declined during the last three months. When he
enquired from the Sales Manager, the Sales Manager reported that there were some
complaints about the quality of sweets. Therefore, Harsh ordered for sample checking of
sweets.
Identify the step of Controlling taken by Harsh.
A. Measurement of actual performance
B. Comparison of actual performance with the standards
Page 4 of 9
 C. Analysing Deviations
D. Taking corrective actions

16. Identify the incorrect statement with respect to consumer protection in India. 1
A. It not only includes educating consumers about their rights and responsibilities but
also helps in getting their grievances redressed
B. It not only requires a judicial machinery for protecting the interest of consumers but
also requires the consumers to get together and form themselves into Consumer
associations for protection and promotion of their interests.
C. It is the moral duty of any business to take care of consumers' interest and avoid any
form of exploitation.
D. The provisions of Consumer Protection Act came into force from 1985.
17. The finance manager guided that the company should prevent from using all possible 1
sources of finance in order to maintain its borrowing power. This factor also influences
the choice between debt and equity, especially in companies in which the cash flow
position is on a lower side. The factor affecting choice of capital structure discussed in
the above case is:
A. Flexibility B. Cost of debt C. Cost of equity D. Control
18. 'Best Bulbs Pvt. Ltd. was manufacturing good quality LED bulbs and catering to local 1
market. The current production of the company is 800 bulbs a day. Sumit, the marketing
manager of the company surveyed the market and decided to supply the bulbs to five-
star-hotels also. He anticipated the higher demand in future and decided to buy a
sophisticated machine to further improve the quality and quantity of the bulbs produced.
Identify the factor affecting fixed capital requirements of the company from the options
listed below.
A. Technology upgradation B. Diversification
C. Growth D. Level of competition
19. 'Common Cause' an NGO in Delhi, published the following brief in one of its 1
periodicals:
‘Amul has won a lawsuit against Kwality walls and some other branded ice cream
makers. They can now no longer sell their products as ice cream rather under the new
marketing name ‘frozen dessert’. Amul is the only ice cream manufacturer which makes
ice creams from milk while some other manufacturers use vegetable oils to make ice
creams. So, they are required to label their products as “Frozen Desserts” which says
hydrogenated vegetable oil which is Dalda,’
Identify the consumer right not highlighted in the above case.
A. Right to be informed. B. Right to be assured
C. Right to consumer education D. All of the above
20. 'Mudro Infratech' got a short-term contract for building two villas within a period of ten 1
months with the expectation to earn a huge amount of profit. The Works Manager
accepted this challenge and completed the work within the given time period. The profit
of the company went up by 40% due to this temporary order. The Finance Manager was
aware that the company would not earn this huge profit in the near future. So, he decided
not to increase dividend per share as earnings for the year had gone up, but not the
earning potential of the company. He also knew that this increase in earnings was
temporary in nature. The factor affecting Dividend Decision being highlighted above is:

Page 5 of 9
 A. Cash flow position B. Stability of earnings
C. Growth opportunities D. Stability of dividends

21. A. “If the project is important then more alternatives should be generated and thoroughly 3

discussed amongst the members of the organization.” State the step of Planning
highlighted in the above statement. Also, explain the next two steps which will have
to be carried out to in the process of Planning.

OR 1½
B. State how planning: 1½
a. does not guarantee success
b. leads to rigidity
22. Agrima, Arunima and Avika are pursuing MBA from a reputed institution. Now it is the 3
time of their placement. Agrima wants to work in a company which would provide her
more authority for fulfilling her duties and will give recognition, rewards, perquisites
and prestige of job. Arunima wants to work in an organization in which behavior of
individuals is influenced by its characteristics like autonomy, reward orientation,
consideration to employees, risk taking etc. Avika wants to join the organization which
has appropriate skill development programmes and sound promotion policy that
encourages employees to exhibit improved performance.
Identify and state the incentives about which Agrima, Arunima and Avika are referring
to in the above para.

23. A. State the concept of financial management which enables the firm to foresee the fund 3
requirements both in terms of quantum as well as timings. Also, explain its
objectives.
OR
B. Silk Ltd. had an EPS of ₹ 1. It raised a loan of ₹ 10 lakhs at an interest rate of 10%
p.a. from a bank. After one year, the results were as follows: 3

Details Amount
Equity (Shareholders’ Funds (2,00,000 shares of ₹10 each) ₹ 20 Lakh
10% Loan ₹ 10 Lakh
Earnings Before Interest and Tax (EBIT) ₹ 6 Lakh
Earnings Per Share (EPS) ₹2
Tax rate 20%.

Did the EPS in Silk Ltd. rise with the use of debt? State the reason by showing the
calculation for the same.

24. ‘VBR Cinema', an Indian multiplex cinema hall was the first to recognize the change in
consumption habits of people. It changed its food menu from burgers, pizza, soft drinks,
etc. and switched over to healthier options like salads and smoothies, soups and anjeer-
based sweets. Within a month, the revenue of the multiplex from sale of food items
doubled. 'VBR Cinema', by continuously monitoring the environment and adopting
suitable business practices, was able to improve its revenues and profits and was hopeful
that it will continue to succeed in the market in the long run too.

Page 6 of 9
 A. State the concept of business environment.
1
B. Identify and explain in what way, a good understanding of business environment 2
enabled VBR Cinema to improve its performance.

25. A. Explain any four features of the aspect of the management whereby an executive 4
develops an orderly pattern of group efforts among his subordinates and secures
unity of action in the pursuit of common purpose.

OR
B. ‘Management is the process of designing and maintaining an environment in which
individuals working together in groups, efficiently accomplish selected aims.’
Explain any four reasons that make management important to any organization in the
light of the above statement.

26. Shweta Ltd. deals in two different types of businesses i.e garments and toys. During last 4
month, Rahul, working in accounts department of garments was shifted to accounts
department of toys, without a substantial change in the responsibilities and status. Ajay,
working as a supervisor was shifted to higher post which carried higher responsibilities,
facilities, status and pay.
Shweta Ltd is planning a test to measure potential of prospective employees for learning
new skills. Thus, it would indicate person’s capacity to develop. Also, the company is an
employee centric organization and intends to enhance the knowledge and skills of its
employees. Hence it has launched ‘The Project Guidance Program’ which is a 52-day
structured training program offered to all recruits of varied backgrounds to be trained on
essential behavioural and technical skills that prepares them to work in live customer
projects.
These recruits are hired from universities and management institutes for technical,
professional as well as managerial jobs. It is to help the new employees in settling down
quickly into the job by becoming familiar with the people, the surroundings, the job and
the business.
A. Which type of recruitment has taken place in case of Ajay and Rahul?
B. Give one merit of the type of recruitment applied in case of Ajay.
C. Suggest the tests which Shweta Ltd should conduct to measure individual potential

for learning new skills and ability to make decisions and judgements.
D. Identify the method of training used by the company to train employees selected by
the source of recruitment identified in part (a)
E. State any one way in which the Project Readiness Program can benefit Shweta Ltd.

27. Ruchika is a successful manager at Jaysons Enterprises. She has a team of fifteen people 4
working under her. She gives high degree of freedom to her subordinates to set their own
goals and device the ways and means to achieve the goals. She doesn’t believe in the use
of power and provides them with the required information if the team needs it. As an
intelligent manager, at times, she also makes use of positive aspects of informal
communication. This way, she is able to unify diverse interests and ensure that the
targets are met.
A. There are many theories and styles of influencing people’s behavior. Identify and
draw the diagram depicting the style used by Ruchika which is based on the use of
authority.

Page 7 of 9
 B. State two positive aspects of the communication discussed above, which Ruchika is
using as an intelligent manager.

28. ‘Memo Builders' was constructing a five-star hotel for a leading hotel chain. The hotel 4
had to be given possession by next year but the construction of the hotel was running six
months behind schedule. The Chief Executive Officer of 'Memo Builders' was concerned
as Memo Builders was known for its quality and timely completion of projects. He asked
Nitin, the senior of the Project Head for a thorough investigation. Nitin investigated and
reported to the Chief Executive Officer that in spite of huge absenteeism of workers,
additional workers were not called. Nitin also reported to the Chief Executive Officer
that three of the ten machines being used by the workers were defective. Nitin ordered
for repair of the machines and asked the Project Head to appoint additional workers with
attractive wages to ensure that the deadline is met.

A. Identify the function of management.

B. Quoting the lines from the above para, explain the steps of the process of the function
of management discussed in the above case.
29. A. Give any four points of difference between Production and Societal Marketing 4
philosophy.
OR
B. Explain the important activities involved in physical distribution.
30. Two years ago, Madhu completed her degree in food technology. She worked for some 4
time in a company manufacturing chutney, pickles and murabbas. She was not happy in
the company and decided to have her own organic food processing unit for the same. She
set the objectives and the targets and formulated action plan to achieve the same. One of
her objectives was to earn 10% profit on the amount invested in the first year. It was
decided that raw materials like fruits, vegetables, spices etc. will be purchased on three
months credit from farmers cultivating organic crops only. She also decided to follow
the steps required for marketing of the products through her own outlets. She appointed
Mohan as a Production Manager who decides the exact manner in which the production
activities are to be carried out. Mohan also prepared a statement showing the number of
workers that will be required in the factory throughout the year. Madhu informed Mohan
about her sales target for different products, area wise for the about her sales target for
different products, area wise for the forthcoming quarter. While working on the
production table a penalty of Rs 100 per day for not wearing the caps, gloves and apron
was announced.
Identify and explain the different types of plans discussed in the above para.
31. ‘It was established by the Government of India on 12 April 1988 as an interim
administrative body to promote orderly and healthy growth of the securities market and
for investor protection. It was given statutory status in 1992 through an Act of
Parliament.’
A. Identify the regulatory body which has been highlighted above. 1
B. State the three objectives of the regulatory body identified in part (A). 3

Page 8 of 9
 C. State any two functions that are performed for protecting the rights and interests of 2
the investors by the regulatory body identified in part (B).
32. A. Differentiate between formal organisation and informal organisation on the basis of: 6
a. Origin b. Authority c. Behavior
d. Flow of communication e. Nature f. Leadership

OR

B. ’Delegation helps a manager to extend his area of operations as without it, his
activities would be restricted to only what he himself can do.’ In light of the above
statement, explain how effective delegation helps the organization in achieving
objectives.

33. Saumya has been appointed as the Operations Manager in a small trading company 6
dealing in garments, with growing online sales. The company has recently rented space
in a warehouse to store garments and mail out orders. In order to take over the
responsibilities of order fulfilment, Saumya promotes an associate, Nikhil to the post of
Inventory and Order fulfilment Supervisor. Nikhil has been given the task to assess
whether it is best to process orders as they come in or let them accumulate and then to
process them in batches. He concludes that accumulating and then processing them in
batches is the best way of fulfilling orders, in order to minimise cost and maximise
customer satisfaction. Through several readings Saumya finds that the standard time
taken from the placement of order to the delivery of garments for a batch of 100 pieces is
72 hours. This helped her to determine the labour cost. The trading company regularly
invests in training and development programmes to equip employees with the necessary
skill and knowledge. The company believes that efficient employees will produce more
and earn more. This will ensure their greatest efficiency and prosperity for both company
and workers.
The above case highlights the use of scientific principles and techniques by Saumya and
Nikhil. Explain any one such principle and two techniques.

34. A. Explain any six functions which guide the marketing efforts of an organization. 6

OR
B. Define market offering. Explain the various tools of Promotion Mix

Page 9 of 9