CBSE Class 12 Question Paper 2022 Solution Business Studies

Strictly Confidential: (For Internal and Restricted use only)
Senior Secondary School Term II Examination, 2022
Marking Scheme – SUBJECT NAME (SUBJECT CODE — 054)
(PAPER CODE — 66/1/1)

General Instructions: -

1. You are aware that evaluation is the most important process in the actual and
correct assessment of the candidates. A small mistake in evaluation may lead
to serious problems which may affect the future of the candidates, education
system and teaching profession. To avoid mistakes, it is requested that before
starting evaluation, you must read and understand the spot evaluation
guidelines carefully.

2. “Evaluation policy is a confidential policy as it is related to the
confidentiality of the examinations conducted, Evaluation done and
several other aspects. Its leakage to public in any manner could lead to
derailment of the examination system and affect the life and future of
millions of candidates. Sharing this policy/document to anyone,
publishing in any magazine and printing in News Paper/Website etc. may
invite action under IPC.”

3. Evaluation is to be done as per instructions provided in the Marking Scheme.
It should not be done according to one’s own interpretation or any other
consideration. Marking Scheme should be strictly adhered to and religiously
followed. However, while evaluating, answers which are based on latest
information or knowledge and/or are innovative, they may be assessed
for their correctness otherwise and marks be awarded to them.

4. The Head-Examiner must go through the first five answer books evaluated by
each evaluator on the first day, to ensure that evaluation has been carried out
as per the instructions given in the Marking Scheme. The remaining answer
books meant for evaluation shall be given only after ensuring that there is no
significant variation in the marking of individual evaluators.

5. Evaluators will mark( √ ) wherever answer is correct. For wrong answer ‘X’
be marked. Evaluators will not put right kind of mark while evaluating which
gives an impression that answer is correct and no marks are awarded. This is
most common mistake which evaluators are committing.

6. If a question has parts, please award marks on the right-hand side for each
part. Marks awarded for different parts of the question should then be totalled
up and written in the left-hand margin and encircled. This may be followed
strictly.

7. If a question does not have any parts, marks must be awarded in the left-hand
margin and encircled. This may also be followed strictly.

8. If a student has attempted an extra question, answer of the question deserving
more marks should be retained and the other answer scored out.

9. No marks to be deducted for the cumulative effect of an error. It should be
penalized only once.

10.A full scale of marks 0-40 has to be used. Please do not hesitate to award full
marks if the answer deserves it.

11.Every examiner has to necessarily do evaluation work for full working hours
i.e., 8 hours every day and evaluate 30 answer books per day in main subjects
and 35 answer books per day in other subjects (Details are given in Spot
Guidelines). This is in view of the reduced syllabus and number of questions
in question paper.

12.Ensure that you do not make the following common types of errors committed
by the Examiner in the past:-
 Leaving answer or part thereof unassessed in an answer book.
 Giving more marks for an answer than assigned to it.
 Wrong totaling of marks awarded on a reply.
 Wrong transfer of marks from the inside pages of the answer book to the
title page.
 Wrong question wise totaling on the title page.
 Wrong totaling of marks of the two columns on the title page.
 Wrong grand total.
 Marks in words and figures not tallying.
 Wrong transfer of marks from the answer book to online award list.

 Answers marked as correct, but marks not awarded. (Ensure that the right
tick mark is correctly and clearly indicated. It should merely be a line.
Same is with the X for incorrect answer.)
 Half or a part of answer marked correct and the rest as wrong, but no marks
awarded.

13.While evaluating the answer books if the answer is found to be totally
incorrect, it should be marked as cross (X) and awarded zero (0)Marks.

14.Any unassessed portion, non-carrying over of marks to the title page, or
totaling error detected by the candidate shall damage the prestige of all the
personnel engaged in the evaluation work as also of the Board. Hence, in order
to uphold the prestige of all concerned, it is again reiterated that the
instructions be followed meticulously and judiciously.

15.The Examiners should acquaint themselves with the guidelines given in the
Guidelines for spot Evaluation before starting the actual evaluation.

16.Every Examiner shall also ensure that all the answers are evaluated, marks
carried over to the title page, correctly totaled and written in figures and
words.

17.The Board permits candidates to obtain photocopy of the Answer Book on
request in an RTI application and also separately as a part of the re-evaluation
process on payment of the processing charges.

MARKING SCHEME
Senior Secondary School Examination TERM–II, 2022
BUSINESS STUDIES (Subject Code — 054)
[ Paper Code — 66/1/1]
Q. No. EXPECTED ANSWER / VALUE POINTS Marks
1. Q. Identify and state the step in the process of staffing
under which the charge of the job is given to the
1 mark for
selected employee and he/she is introduced to his/her
identifying +
superiors, subordinates and colleagues.
1 mark for
Ans. Placement and Orientation
stating the
Placement refers to the employee occupying the position step
or post for which he has been selected while orientation
=2 marks
involves introducing the selected employee to other
employees and familiarising him with the rules and
policies of the organisation.

2. Q. KLM Bank Ltd. is a leading bank with various
branches across the country. On 27th Jan. 2022, it faced
a sudden temporary shortage in cash balance in one of
its branches. On the same day, it was decided by its
directors to borrow funds from another bank for two 1 mark of
days to maintain its cash reserve ratio. identifying
Identify and explain the money market +
instrument used by XLM Bank Ltd. to meet its short 1 mark for its
term funds requirement. explanation
Ans. Call Money = 2 marks
Call money is a method by which banks borrow from each
other to be able to maintain the cash reserve ratio.

3. Q. Give the meaning of ‘Communication' as an element
of directing.
2 marks
Ans. Communication is the process of exchange of
information between two or more persons to reach
common understanding.

4. Q. Identify and state the function of management which
ensures that the organisational resources are being
used effectively and efficiently for the achievement of' 1 mark for
pre-determined goals. identifying
Ans. Controlling +
Controlling is the function of management which ensures 1 mark for
that the activities in an organisation are performed as per statement
plans by comparing actual performance with the standards, = 2 marks
finding out deviations and taking corrective action, if
required.
(or any other correct statement)
5. Q. Nandita Srivastava is the Human Resource
Manager of 'TM Infrastructure Ltd.' It is one of the
largest construction companies in India. The company
handles projects worth more than ₹18,000 crore.
The responsibilities of Nandita Srivastava include
searching and hiring suitable people for different posts
in the organisation.
To measure certain characteristics of potential
candidates, who apply for various vacancies, she is
required to conduct a series of selection tests
appropriate for different posts. These tests will help ½ mark for
her to predict for which job the applicant will be naming each
successful, if hired. test
Explain any two types of selection tests that may +
be conducted by Nandita Srivastava to select the 1 mark for
most suitable persons. explanation

Ans. The selection tests that may be conducted by Nandita
Srivastava to select the most suitable persons are (any
two): =1½x2
(i) Intelligence Tests
(ii) Aptitude Tests = 3 marks
(iii) Personality Tests
(iv) Trade Tests
(v) Interest Tests

6. Q. What is meant by non-monetary incentives? State
any two non-monetary incentives.
Ans. Non-monetary incentives mean those incentives 1 mark for
which emphasise on providing psychological and meaning
emotional satisfaction rather than money-driven
satisfaction to employees.
Non-monetary incentives (any two) :
(i) Status refers to the ranking of positions in the
organization indicated by authority, responsibility, +
rewards, recognition, perquisites and prestige of job
given to a person holding a managerial position.

(ii) Organisational climate indicates the characteristics
which describe an organisation and influence the
behaviour of individuals in the organisation.

(iii) Career Advancement Opportunity includes
opportunities provided to employees to improve their
skills and be promoted to the higher level jobs.

(iv) Job Enrichment is concerned with designing jobs
that include greater variety of work content, requiring 1 mark for
higher level of knowledge and skill to provide a each incentive
meaningful work experience.
=1x2
(v) Employee Recognition Programmes means = 2 marks
appreciating the work performed by employees so
that they feel motivated and perform at higher level. =1+2
=3 marks
(vi) Job Security involves giving stability about future
income and work to an employee so that he does not
feel worried on these aspects and works with greater
zeal.

(vii) Employee Participation means involving employees
in decision-making of the issues related to them.

(viii) Employee Empowerment means giving more
autonomy and powers to subordinates to make
people feel that their jobs are important.
(If an examinee has only listed the points, ½ mark for
each point should be awarded)
OR OR
Q. State any three benefits of training to the
organisation.
Ans. Benefits of training to an organisation (any
three):
(i) It is a systematic learning that helps to avoid wastage
of efforts and money. 1 mark for
(ii) It enhances employee productivity both in terms of each benefit
quantity and quality, leading to higher profits.
(iii) It equips the future manager who can take over in
case of emergency. =1x3
(iv) It increases employee morale and reduces
absenteeism and employee turnover. = 3 marks
(v) It helps in obtaining effective response to fast
changing economic and technological environment.
(If an examinee has only listed the points, ½ mark for
each point should be awarded)

7. Q. State any three factors affecting working capital
requirements of a company.
Ans. Factors affecting working capital requirements
of a company (any three)
(i) The nature of a business influences the amount of
working capital required as a trading organisation
usually needs a smaller amount of working capital
compared to a manufacturing organisation. Service
industries which usually do not have to maintain
inventory require less working capital.

(ii) Scale of operation is a factor affecting working
capital as organisations which operate on a higher 1 mark for
scale of operation require large amount of working each factor

capital as compared to the organisations which
operate on a lower scale.

(iii) Different phases of business cycles affect the
requirement of working capital by a firm as in case of
a boom, the sales as well as production are likely to
be larger and, therefore, larger amount of working
capital is required while during depression, the
requirement of working capital will be comparatively
low.

(iv) Seasonality in operations affects working capital
requirements as in peak season, larger amount of
working capital is required while the requirement for
working capital will be lower during the lean season.

(v) Working capital requirement is higher in firms with
longer production cycle and lower in firms with
shorter production cycle.

(vi) A liberal credit policy results in higher amount of
debtors, increasing the requirement of working
capital.

(vii) To the extent a firm avails the credit on purchases
from its suppliers, the working capital requirement is
reduced.

(viii) Operating efficiency affects the requirement of
working capital as firms which manage their =1x3
operations efficiently may reduce the level of raw
materials, finished goods and debtors resulting in
lower requirement of working capital.
= 3 marks
(ix) Free and continuous availability of raw material
will reduce the requirement of working capital
whereas larger time lag between placement of order
and receipt of material will lead to requirement of
larger working capital.

(x) If a firm has higher growth prospects, it will require
larger amount of working capital so that it is able to

meet higher production and sales target whenever
required.

(xi) Higher level of competition may necessitate larger
stocks of finished goods to meet urgent orders from
customers, thereby, increasing the working capital
requirement.

(xii) The working capital requirement of a business
become higher with higher rate of inflation.
(If an examinee has only listed the points, ½ mark for
each point should be awarded.)

8. Q. Explain how controlling helps in 'accomplishing
organisational goals and judging accuracy of
standards'.
Ans. Controlling helps in ‘accomplishing organisational
goals’ by bringing to light the deviations and indicating 1½ marks
corrective action. It guides the organisation and keeps it on
the right track so that organisational goals might be
+
achieved.
1½ marks
Controlling helps in ‘judging accuracy of standards’ by
reviewing and revising them in the light of organisational
and environmental changes. = 3 marks

9. Q. Explain the following consumer rights
provided under the Consumer Protection Act,
2019 :
(i) Right to safety
(ii) Right to be informed
Ans.
(i) Right to Safety:
2½ marks
 The consumer has a right to be protected against goods
and services which are hazardous to life, health and
property.

+
 Consumers are educated that they should use products
which are standardised as this would be an assurance
of such products meeting quality specifications.

(ii)Right to be informed: 2½ marks
 The consumer has a right to have complete
information about the product he intends to buy
including its ingredients, date of manufacture, price,
quantity, directions for use etc. = 5 marks
 It is a legal requirement to provide such information
on the package and label of the product.
OR
OR

Q. State any five responsibilities that should be kept
in mind by a consumer while purchasing and
using/consuming goods and services.
Ans Responsibilities that should be kept in mind by a
consumer while purchasing and using, consuming
goods and services (any five):
(i) Be aware about the various goods and services
available in the market, so that intelligent and wise
choice can be made.
(ii) Buy only standardized goods as they provide quality 1 mark for
assurance. each
(iii) Learn about the risk associated with products and responsibility
services, follow manufacturers instructions and use
the products safely.
(iv) Read labels carefully to have information about
prices, net weight, manufacturing and expiry dates
etc.
(v) Assert yourself to ensure that you get a fair deal.

(vi) Be honest in your dealings and choose only from legal
goods and services and discourage unscrupulous
practices.
(vii) Ask for a cash memo on purchase of goods and
services as this would serve as a proof of the purchase
made.
(viii) File a complaint in an appropriate consumer forum in
case of a shortcoming in the quality of goods
purchased or services availed. =1×5
(ix) Form consumer societies which would play an active = 5 marks
part in educating consumers and safeguarding their
interests.
(x) Respect the environment. Avoid waste, littering and
contributing to pollution.

(If an examinee has only listed the points, ½ mark for
each point should be awarded.)
10. Q. State any five functions of a 'Stock Exchange'.
Ans. Functions performed by a Stock Exchange (any
five):
(i) Stock Exchanges provide liquidity and marketability
to existing securities by giving investors the chance
to disinvest and reinvest.

(ii) They help in determining the prices of securities
through the forces of demand and supply.

(iii) Stock exchanges ensure the investors safety of 1 mark for
transactions and fair deal on the market as they are each function
well-regulated and their dealings are well-defined
according to the existing legal framework. =1x5

(iv) Stock exchanges contribute to economic growth
through the process of disinvestment and reinvestment = 5 marks
and channelising the savings into most productive
investment avenues.

(v) Stock exchanges spread equity cult by regulating
new issues, better trading practices and taking
effective steps in educating the public about
investments.

(vi) Stock exchanges provide sufficient scope for
speculation within the provisions of law in a
restricted and controlled manner.
(If an examinee has only listed the points, ½ mark for
each point should be awarded.)

11. Q. Gautam Natarajan is the founder of ‘Brewed
Beans Coffee', a famous chain of 21outlets in South
India, selling high quality filter coffee.
He is known for his leadership and vision. He
believes that human resources, are the most
important assets of an organisation. He often quotes,
''The right people can help you take your business to
the top, the wrong people can break. your business."
This is the reason he considers the function of
management that fills the various positions in the
organisation structure to be the most critical and
fundamental to organisational performance.
(a) Identify the function of management that has
been emphasised by Gautam Natarajan.
(b) State any four points of importance of function 1 mark for
identified in (a) above. identifying
Ans.
(a) Staffing +
(b) Importance of Staffing (any four):
(i) It helps in discovering and obtaining competent
personnel for various jobs. 1 mark for
(ii) It makes for higher performance by putting right each point of
person on the right job. importance
(iii) It ensures continuous survival and growth of the =1 x 4
enterprise through the succession planning for
= 4 marks
managers.

(iv) It helps to ensure optimum utilisation of human
resources by avoiding overmanning and under-
utilisation of personnel.
(v) It improves job satisfaction and morale of
employees through objective assessment and fair
rewarding of their contribution. = 5 marks
(If an examinee has only listed the points, ½ mark for
each point should be awarded.)

12. Q. Anurag Tiwari is a famous news reader. He has
recently started a news company 'Axis Media
Corporation Ltd.'. The aim of this company is to
launch a 24-hour Hindi news channel to broadcast
latest news from India and around the world.
For this new venture, the company will have to
decide how to invest funds in different assets. The
purchase of few assets like equipment, computers,
vehicles, etc. will involve committing the finance on a
long-term basis. It will affect earning capacity of the
business in the long run. Therefore, the company
needs to take the decision to invest in such assets with
utmost care.
(a) Identify and state the type of investment decision
discussed in the above paragraph.
(b) State any three factors which affect the decision
identified in (a) above. 1 mark for
Ans. identifying
(a) Long Term Investment Decision/Capital +
Budgeting: 1 mark for
A long-term investment decision (also called capital stating
budgeting) involves committing funds on a long-term = 2 marks
basis and affect its earning capacity in the long run. +
1 mark for
(b) Factors affecting long-term Investment each factor
Decision/Capital Budgeting decision: (any three) =1x3
(i) The amount of cash flows of the project should be = 3 marks
carefully analysed before considering a capital
budgeting decision, which may be in the form of a series

of cash receipts and payments over the life of an
investment.
(ii) The expected rate of return from each proposal and
the assessment of risk involved are important factors
while taking capital budgeting decisions.
= 2+3
(vii) Several investment criteria may be used to evaluate
investment proposals regarding the amount of = 5 marks
investment, interest rate, cash flows and rate of return,
etc., before taking the decision to invest in a particular
project.

OR OR
Q. 'Reliable Labs Ltd.' is a trusted name in diagnostic
services with seven branches spread across the city of
Pune. The directors of this company have projected
that with the rise in health consciousness in the
society and the rising burden of chronic diseases, the
demand for diagnostic tests is expected to grow in
future. Considering this, they decided to open
branches of their diagnostic labs in Ahmedabad.
It was estimated that it will require ₹100 crore of
additional funds. The directors have to take the
decision about how much funds should be raised
from equity capital and how much from debt. It will
affect the overall cost of capital and the financial risk
of the company.
(a) Identify and state the financial decision
discussed in the above paragraph.
(b) State any three factors that should be kept in
mind by the Board of Directors of 'Reliable Labs Ltd.',
while taking the decision identified in above.
Ans.
1 mark for
(a) Financing decision identifying
Financing decision involves decision about the quantum +
of finance to raise from various long-term sources.
1 mark for
stating
(b)Factors that should be kept in mind by the Board
= 2 marks
of Directors of ‘Reliable Labs Ltd’ while taking
the above decision (any three):

(i) The cost of raising funds through different sources +
are different and a prudent financial manager would
normally opt for a source which is the cheapest.
1 mark for
(ii) The risk associated with each of the sources is
each factor
different.

(iii) Higher the floatation cost, less attractive the source.

(iv) A stronger cash flow position may make debt
financing more viable than funding through equity.

(v) If a business has high fixed operating costs, it must
=1x3
reduce fixed financing costs, thus, lower debt
financing is better. = 3 marks

(vi) Issues of more equity may lead to dilution of
management’s control over the business while debt
financing has no such implication. = 2+3
= 5 marks
(vii) State of the capital market may also affect the
choice of source of fund as during the period when
stock market is rising, more people invest in equity,
whereas depressed capital market may make issue of
equity shares difficult for any company.

(If an examinee has only listed the points, ½ mark for
each point should be awarded.)