Arts (English Medium) Class 12 - CBSE Question Bank Solutions for Business Studies

Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose the company needs additional Rs. 80,00,000 for replacing machines with modern machinery of higher production capacity. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was Rs. 8,00,000 and total capital investment was Rs. 1,00,00,000. Suggest whether issue of debenture would be considered a rational decision by the company. Give reason to justify your answer. (Ans. No, Cost of Debt (10%) is more than ROI which is 8%).

Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.

“Capital structure decision is essentially optimisation of risk-return relationship.” Comment.

The workers of a factory remain idle because of lack of knowledge of hi-tech machines. Frequent visit of engineer is made which causes high overhead charges. How can this problem be removed. (vestibule training)

Explain the term ‘Trading on Equity’? Why, when and how it can be used by company.

‘ No organisation can be successful unless it fills and keeps the various positions filled with the right kind of people for the right job.’ Elucidate

What are the advantages of training to the organisation?

The workers always try to show their inability when any new work is given to them. They are always unwilling to  take up any kind of work. Due to sudden rise in demand a  firm wants to meet excess orders. The supervisor is finding  it difficult to cope up with the situation. State the element of directing that can help the supervisor in handling the  problem .

Explain the process of motivation with the help of a diagram.

What are the objectives of SEBI?

Explain the objectives and functions of the SEBI.

India’s largest domestic investor Life Insurance Corporation of India has once again come to government’s rescue by subscribing 70% of Hindustan Aeronautics Rs.4,200-crore initial public offering.

a. Which market is being reflected in the above case?

b. State which method of floatation in the above identified market is being highlighted in the case? (Primary Market)

c. Explain any two other methods of floatation. (Private Placement, Offer through prospectus, offer for sale).

Lalita wants to buy shares of Akbar Enterprises, through her broker Kushvinder. She has a Demat Account and a bank account for cash transactions in the securities market. Discuss the subsequent steps involved in the screen-based trading for buying and selling of securities in this case.

Explain how management audit serves as an effective
technique of controlling.

State any three Development functions of Securities and Exchange Board of India.

Answer the following question.
'Determining the relative proportion of various types of funds depends upon various factors.' Explain any six such factors.

Coordination can be considered as ______.

Coordination is ______.

The form of organisation known for giving rise to rumours is called ____________.

Read the following text and answer the following questions on the basis of the same:

Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of Rs. 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.

Identify the concept of Financial Management as advised by Mr. Ghosh in the above situation.