CBSE SAMPLE QUESTION PAPER (2026-27)
SUBJECT: BUSINESS STUDIES (054)
CLASS: XII | SA-2 (FULL SYLLABUS) | SET - 3
Time Allowed: 3 Hours
Maximum Marks: 80
General Instructions
- This question paper contains 34 questions. All questions are compulsory.
- Questions 1 to 20 are objective-type questions carrying 1 mark each.
- Questions 21 to 24 are short-answer type questions carrying 3 marks each.
- Questions 25 to 30 are short-answer type questions carrying 4 marks each.
- Questions 31 to 34 are long-answer type questions carrying 6 marks each.
- Internal choices have been provided in select questions. You must attempt only one of the choices in such questions.
SECTION A
1.
The objective of management which consistently creates economic value for various constituents of society is known as:
[1]
2.
F.W. Taylor insisted that each worker should be supervised by eight specialized foremen to ensure expert guidance in all aspects of the job. This technique is called:
[1]
3.
The sudden demonetization of ₹500 and ₹1,000 currency notes by the Government of India is a prime example of a change in which dimension of the business environment?
[1]
4.
Which function of management bridges the gap between where we are and where we want to go?
[1]
5.
In an organization, the transfer of authority from a superior to a subordinate to enable them to perform a specific assigned task is called:
[1]
6.
Training provided to a new employee to familiarize him with his job, colleagues, and the overall organizational rules is called:
[1]
7.
Which element of directing deals with the exchange of ideas, facts, opinions, or emotions between two or more persons to create common understanding?
[1]
8.
In the controlling process, if the deviations are minor and well within the acceptable limits, the manager should:
[1]
9.
The decision regarding the proportion of long-term debt and equity to be used in the capital structure of a company is known as:
[1]
10.
Which instrument of the money market is used by commercial banks to maintain their required Cash Reserve Ratio (CRR) with the RBI?
[1]
11.
Under the marketing mix, offering a 'Buy 1 Get 1 Free' scheme to clear out old winter clothing stock is an example of:
[1]
12.
Which consumer right protects individuals against the marketing of goods and services that are hazardous to life and property?
[1]
13.
The principle of 'Remuneration of Employees' laid down by Henri Fayol implies that:
[1]
14.
A company is struggling with delayed decisions because every operational file must be physically signed by the central headquarters located 500 kilometers away. The organization structure suffers from a lack of:
[1]
15.
Which of the following functions of SEBI involves conducting inspections and audits of the stock exchanges to prevent fraud?
[1]
16.
When a manufacturer bypasses wholesalers and retailers entirely and sells directly to the final consumer (e.g., through their own website or door-to-door), they are using a:
[1]
17.
Which financial decision requires a firm to carefully evaluate long-term investment proposals based on the expected cash flows and the rate of return?
[1]
18.
Identify the specific financial market and the market sentiments represented by the animal metaphors in the visual description above.
[1]
19.
Assertion (A): Higher operating risk demands lower financial risk in a company's capital structure.
Reason (R): Operating risk relates to fixed operating costs (like rent and salaries). If these are already very high, issuing more debt will add massive fixed interest burdens, increasing the chances of bankruptcy.
[1]
20.
Assertion (A): Primary market indirectly promotes capital formation.
Reason (R): In the primary market, savings are mobilized directly from investors and channeled to the companies issuing new securities for productive long-term investments.
[1]
SECTION B
21.
The government's decision to provide massive tax incentives for solar energy projects caused a major shift. Consequently, numerous thermal power companies began diversifying their investments into solar panel manufacturing to capture this new market trend, while simultaneously dealing with a more environmentally conscious consumer base.
Identify and explain the two dimensions of the business environment driving this change.
[3]
22.
After launching a highly successful cosmetic cream, the company realized that customers were struggling to identify their original product amidst several fake local copies. To resolve this, they invested heavily in designing a unique, patented container shape and an unmistakable logo.
Identify the two components of the 'Product Mix' highlighted here. Explain how these components help the manufacturer in the long run.
[3]
23.
Explain the concept of 'Commercial Paper' as a money market instrument. State two of its main characteristics and mention the specific purpose for which it is generally used by large corporations.
OR
Differentiate between the 'Primary Market' and the 'Secondary Market' on the basis of: (a) Nature of securities, (b) Flow of capital, and (c) Determination of price.
[3]
24.
A local grocery shop owner consistently charged prices higher than the Maximum Retail Price (MRP) printed on the packets of daily necessities. When a consumer pointed this out, the shopkeeper rudely told him to go to another shop.
Identify the unfair trade practice committed by the shopkeeper. State any two responsibilities the consumer must fulfill to seek legal protection in this scenario.
[3]
SECTION C
25.
During an inspection at an automobile assembly plant, the quality control manager noticed that different workers were using vastly different techniques to fit the same engine part. Some took 10 minutes, while others took 25 minutes. To eliminate this inconsistency, he initiated a thorough analysis of the physical movements required, stripped away the unnecessary steps, and established a standard, highly efficient procedure that every worker had to follow strictly.
Identify and explain the principle of Scientific Management applied by the manager. Furthermore, identify the specific technique of scientific management he used to standardize the procedure.
[4]
26.
'Zenith IT Park' had a reputation for hiring only from elite universities. However, they soon noticed that these employees lacked practical problem-solving skills despite their academic brilliance. To rectify this, the HR department shifted its strategy. They began advertising in trade journals, specifically targeting professionals who already had 3-5 years of hardcore industry experience in competitor firms.
Identify the source of recruitment adopted by 'Zenith IT Park'. Discuss any three advantages of using this specific source of recruitment over their previous strategy.
[4]
27.
The Sales Manager of a real estate firm noticed his team was highly demotivated. He called a meeting and realized that mere salary increments were no longer working. To reignite their passion, he publicly praised the top performers, gave them the autonomy to negotiate closing prices directly with clients without his prior approval, and promised to promote the best performer to 'Regional Head' by the end of the year.
Identify and explain the three specific Non-Financial Incentives utilized by the Sales Manager to motivate his team.
OR
Communication involves the flow of information. Explain the 'Communication Process' by clearly defining the roles of the Sender, Encoding, Media (Channel), and Decoding.
[4]
28.
A heavy machinery manufacturer is estimating its Working Capital requirements for the next financial year. The CFO notes that it takes approximately six months to convert raw steel into the final industrial machine. Secondly, their clients usually demand a 90-day credit period before settling invoices. Thirdly, the company faces stiff competition, requiring them to hold massive inventories of spare parts to ensure immediate repairs for clients.
Identify and explain the three factors affecting the 'Working Capital' requirements of the manufacturer as highlighted in the scenario above.
[4]
29.
Explain the process of trading on a Stock Exchange, highlighting the chronological steps from the 'Selection of a Broker' to the final 'Execution of the Order' and issuance of the 'Contract Note'.
[4]
30.
'UltraLife Goods' manufactures a single product: bathing soap. They use a structure where all activities are grouped by functions like Production, Sales, and Finance. Encouraged by their profits, they decide to launch two entirely new product lines: Packaged Juices and Cosmetics. The CEO insists on continuing with the same old functional structure. However, within months, the Marketing Head complains he cannot manage ad campaigns for soaps, juices, and cosmetics simultaneously.
Identify the existing organizational structure of the company. Why is this structure failing after the expansion? Suggest the most suitable organizational structure for 'UltraLife Goods' now, and state two of its advantages.
[4]
SECTION D
31.
The Board of Directors of 'Global Travels' is alarmed by a sudden drop in their market share due to the entry of aggressive foreign tour operators. The CEO decides to implement a robust planning process to counter this threat. First, he establishes a firm objective: "Recapture 20% market share within twelve months." Second, he directs his team to analyze the future business environment, forecasting a rise in aviation fuel prices and an increase in domestic tourism post-pandemic. Third, the team brainstorms various strategies, including acquiring smaller local travel agencies, launching massive discount schemes, or offering ultra-luxury customized packages. Fourth, they rigorously analyze the financial implications, risks, and potential returns of each of these three options. Finally, after intense debate, they decide that 'launching massive discount schemes' is the most viable option and they formulate a secondary plan to hire 50 new sales executives to execute it.
Identify and deeply explain the **first five sequential steps of the Planning Process** that the management of 'Global Travels' has painstakingly executed in the given scenario to secure their future in the market.
[6]
32.
'Apex Infrastructure Ltd.' requires a massive infusion of ₹500 Crores to construct a modern commercial complex in a prime metropolitan area. The Board of Directors is deeply divided on how to raise this capital. Mr. Sharma, the founder, strongly argues for issuing new Equity Shares. He points out that the real estate market is highly unpredictable right now, and if the project gets delayed, issuing debt would mean paying massive fixed interest out of their own pockets, which could bankrupt them. On the other hand, the Chief Financial Officer (CFO) vehemently opposes issuing equity. He argues that the current corporate tax rate is a staggering 35%, making debt an extremely cheap source of finance due to tax deductibility. He further states that the company has a very strong cash flow position from its other completed projects, ensuring they can easily service any debt obligations without fail. Furthermore, he warns Mr. Sharma that issuing ₹500 Crores of equity will permanently dilute his voting control over the company.
Analyze the intense financial debate above. By quoting specific lines from the paragraph, identify and deeply explain the **four distinct factors affecting the Capital Structure (Financing Decision)** that are being evaluated by the management of 'Apex Infrastructure Ltd.'
[6]
33.
'Vanguard Electronics' is launching a revolutionary new smartwatch. The Chief Marketing Officer (CMO), Ms. Aditi, knows that a great product will fail without an exceptional marketing mix. First, she ensures the smartwatch is packed with unique health-tracking sensors that competitors lack, and gives it an aggressive, legally registered brand name to build an elite identity. Second, she realizes the target audience consists of young, tech-savvy professionals with high purchasing power. Therefore, she sets a premium price tag of ₹25,000 to recover the massive research and development costs quickly. Third, instead of selling through traditional electronics shops, she partners exclusively with premium lifestyle boutiques and leading e-commerce platforms to ensure the product is available exactly where the youth shops. Finally, she hires a popular sports icon to feature in a massive, multi-million rupee television commercial to instantly create mass awareness and desire among the target audience.
The case study vividly illustrates the implementation of the four core pillars of marketing. Identify and deeply explain the **four elements of the Marketing Mix** utilized by Ms. Aditi, providing relevant context from the scenario for each element.
[6]
34.
Mr. Kapoor, the manager of a large customer service center, noticed that the average call resolution time had jumped from the standard 5 minutes to 12 minutes, causing massive customer dissatisfaction. Recognizing this as a critical failure in the controlling process, he immediately investigated the cause. He discovered that the newly updated CRM software was excessively complicated and frequently crashed, forcing the executives to manually enter data. Realizing that the executives were not at fault, he immediately contacted the IT department to roll back the software to the older, stable version until the bugs were fixed. He also revised the standard call resolution time to 7 minutes temporarily until the system was fully optimized.
While discussing this with his deputy, Mr. Kapoor stated, "If we hadn't set that 5-minute standard during our planning phase, we would have never realized we were failing today. And because we caught this failure today, our future planning for software upgrades will be much more rigorous."
Based on the case above, answer the following:
(a) Identify and explain the **two sequential steps of the Controlling Process** executed by Mr. Kapoor when he investigated the delay and rolled back the software.
(b) Explain the specific principle of analyzing deviations (**Critical Point Control**) and why it was crucial here.
(c) By quoting Mr. Kapoor's statement, elaborate on the **deep relationship between Planning and Controlling**.
OR
Motivation is considered the core of the directing function. Explain the interconnected concepts of 'Motive', 'Motivation', and 'Motivator'. Furthermore, distinguish between 'Financial Incentives' and 'Non-Financial Incentives', providing two specific examples of each that modern organizations use to boost employee morale.
[6]
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