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11 Business Studies SP 1
11 Business Studies SP 1
Maximum Marks: 80
Time Allowed: : 3 hours
General Instructions:
Solution
1. (d) Powerlooms
Explanation: Powerlooms comes under modern small industries.
2. (d) one crore
Explanation: A small scale industrial undertaking is defined as one in which the investment in fixed assets of plant and
machinery does not exceed rupees one crore.
3. (a) Public sector
Explanation: The pubic sector consists of various organisations owned and managed by the government.
4. (a) All of these
Explanation: All of the above reasons are correct for international trade.
5. (c) storage
Explanation: A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers,
importers, exporters, wholesalers, transport businesses, customs, etc.
6. (b) Firm's interactions with other business
Explanation: Firm's interactions with other business
7. (c) Working capital requirement
Explanation: The funds required for day to day operations i.e. to meet expenses like wages, salary, rent, insurance, etc.
and investment in current assets i.e. inventory, bills receivable, etc.
8. (a) Maximum ability and Minimum willingness
Explanation: Maximum ability and Minimum willingness
9. (d) Statutory corporations
Explanation: Statutory corporations are set up under an Act of parliament and are governed by the provisions of the
Act.
10. (c) All of these
Explanation: All of these
11. (c) Geneva
Explanation: At Centre William Rappard, Geneva, Switzerland, where the WTO headquarters is located, is a unique
place, with many United Nations and other international organizations, as well as missions to the WTO.WTO has a
global status similar to that of the IMF and the World Bank.
12. (d) All of these
Explanation: Wholesalers purchase in bulk from manufacturers and sell in small lots to retailers or industrial users.
They do not sell products to ultimate consumers.
13. (d) Promotion, Incorporation, Capital Subscription, Commencement of Business
Explanation: Promotion, Incorporation, Capital Subscription, Commencement of Business
14. (c) Entrepreneurship
Explanation: Entrepreneurship
15. (a) Afforestation
Explanation: Afforestation is a process of planting trees or sowing seeds to create a forest. This is good for nature and
the environment.
16. (c) Licensing
Explanation: Licensing refers to permitting another party in a foreign country to produce and sell goods under
trademarks. patents or copyrights in lieu of some fee.
Pure risk involves no possibility of gain; Speculative Risk is the risk which involves three
(i) Meaning
either a loss occurs or no loss occurs possible outcomes: loss, gain or no change
(ii) Possibility The occurrence of this risk may result in loss The occurrence of this risk may result in the
of profits/loss only and no gains. possibility of both gains as well as loss.
(iii) Risk Insurance services provide coverage of such Such risks cannot be covered under insurance
coverage risks. provisions.
OR
i. Hindrance of persons.
ii. Hindrance of place.
iii. Hindrance of time.
iv. Hindrance of risk.
v. Hindrance of finance.
vi. Hindrance of information/Knowledge.
24. Business need finance to pay for their overhead costs as well as their day to day and variable expenses. Here are three
situations when businesses need to finance the most :
i. Starting a business: Huge amount of finance is needed to start a business that requires buying fixed assets, paying
rents, and other overheads as well as producing or procuring the raw material and goods to sell. The finance required
to start a business is known as startup finance.
ii. Expanding a business: when expanding a huge amount of capital is needed in order to buy more fixed assets or to
fund a takeover. Internal growth by developing new products also requires a notable amount of finance.
iii. A business in difficulties: A loss-making businesses money is needed to buy more efficient machinery or to cover
negative cash flow.
OR
OR
The following are the major affiliated bodies of the World Bank:-
a. IBRD: The International Bank for Reconstruction and Development (IBRD) was established in 1945 to assist in the
reconstruction of war affected countries. It mainly aims at facilitating the development of the poor nations of the
world.
b. IFC: The IFC or the International Finance Corporation, was formed in 1956 as a separate legal entity to provide
finance to the private sector in developing nations. The IFC is part of the World Bank Group. It has its own funds and
functions.
c. MIGA: MIGA refers to the Multinational Investment Guarantee Agency. It was established in April 1988 with the
objective of encouraging foreign direct investments in the less developed countries, insuring investors against·
political and non-commercial risks, providing advisory services, etc.
26. i. The different kinds of industries Raghu wants to set up are
(a) Primary Industry: Dairy Farming
(b) Secondary Industry: Cheese Production Unit
ii. The categories of types of industries discussed above are:
(a) Genetic Industry which is a type of Primary Industry. Genetic Industries are engaged in breeding plants and
animals for their use in future reproduction like dairy farming industry.
(b) Manufacturing Industry which is a type of Secondary Industry. Manufacturing industries are engaged in the
processing of raw materials to produce finished goods. Here Cheese Production Unit produces various combinations
of cheese.
OR
i. The different types of economic activities both the friends are engaged in are: Karan is doing Business whereas the
occupation of Priyanshu is Employment.
ii. The difference between Business and Employment is given below:
S.
Basis Business Employment
No.
1. Qualification There is no minimum qualification A person should be qualified in accordance with the
required for running a business nature of employment that he/she wishes to take up.
OR
These people will find "Consumers' Cooperative Store" useful to be set up because this is only the business organisation
which can save/free them from the clutches of middlemen. But before beginning this business, it is necessary for them to
be aware of its demerits.
Demerits of Consumers Co-operative Store:
i. Loss has to be faced when the market is dull.
ii. There is a possibility of quarrels because consumers form groups.
iii. There is a lack of speciality in these stores because the customers cannot play the role of businessmen successfully.
iv. The spirit of cooperativeness is lost because of the large number of members.
v. There is the facility of withdrawing one's capital. Sometimes, when a large number of members take out their capital,
it endangers the existence of the store.
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32. The capital obtained by the issue of equity shares is known as equity share capital. It is an important source of obtaining
long-term finance. Equity shareholders are the owners of the company. The rate of dividend is paid after meeting all
other claims.
Merits:
i. Equity shares do not create any obligation to pay a fixed rate of dividend.
ii. Equity shares can be issued without creating any charge over the assets of the company.
iii. It is a permanent source of capital and the company has to repay it except under liquidation.
iv. Equity shareholders are the real owners of the company who have voting rights.
v. In the case of profits, equity shareholders are the real gainers by way of increased dividends and appreciation in the
value of shares.
OR
a. On Cumulative Preference Shares, the unpaid dividend on shares gets accumulated and is due for payment in future
years.
Dividend due to Yamini in the year 2016 = 300 × 100 × 10/100 = Rs. 3000
Dividend due to Yamini in the year 2017 = 300 × 100 × 10/100 = Rs. 3000
Total dividend due to Yamini = Rs. 6000
b. On Non-Cumulative Preference Shares, the unpaid dividend on shares does not get accumulated and is not paid as
arrears in the future years. Therefore, only Rs. 3000 is due to Yamini as a dividend.
(Dividend due to Yamini in the year 2017 = 300× 100× 10/100 = Rs. 3000)
33. a. Consumer's Cooperative Society is being described in the above lines.
b. The three features of a consumer cooperative society are:
i. The society aims to protect the interests of consumers by achieving economy in operations by purchasing goods
in bulk directly from the wholesalers and selling them directly to the members thereby, eliminating the
middlemen.