PRUDENCE SCHOOL

PERIODIC ASSSESSMENT-3
SESSION:- (2021-22)
SUBJECT : Business Studies (054)
CLASS XI
SET-B
Time Allotted: 90 mins
Tuesday,14.12.2021 Max.Marks: 30

General Instructions:

1 This question paper contains 7 questions.

2. Marks are indicated against each question.
3. Answers should be brief and to the point.
4. Answers to the questions carrying 3 marks may be from 50 to 75 words.
5. Answers to the questions carrying 4 marks may be about 150 words.
6. Answers to the questions carrying 6 marks may be about 200 words.

1 Avlaksh is working as a finance manager in a German Company producing remote operated high- 3
end kitchen equipment. Considering festival demand, the company needs to increase its stock of
raw material and finished goods which will require funds of ₹50Lakhs. The directors of the
company have decided to expand the business by opening one more factory in India which will
require funds of ₹3crores. State the instrument through which it can raise funds from the Indian
capital market.

2 Singh Ltd is a manufacturer of shoes. It acquires raw material from Chennai and imports dyes 3
from Japan. They wish to sell their shoes in Mumbai so they contacted Keshubhai and Sons.
Keshubhai and Sons bought shoes from Singh Ltd in huge quantities by paying cash and sold them
to Kavya Bros. thus bearing all the risk and relieving Singh Ltd. of marketing activities and
allowing them to concentrate on production.
a. Which type of trading concern Keshubhai and Sons in?
b. State any four services Keshubhai and Sons should provide to Kavya Bros.

3 “Dhruv Auto Ltd” is a very well known auto company in the industry having more equity share 4
capital than long term debt in its capital structure. It is willing to expand and establish new units
in the backward region and wants to train the tribal women in skill development to empower them.
It has a huge cash reserve of ₹ 1000 crores.

a. Identify and explain the source of business that the company intends to use for financing
its expansion plans.
b. State any two limitations of this source.

Page 1 of 2
4 Kanan Ltd. a cloth manufacturing company opens shops at different locations in India. She sells 4
goods on cash only. The shops have identical decorations. The price of goods is fixed. In this
way they eliminate unnecessary middlemen thus benefiting the customers.
a. Identify and state the type of fixed shop retailer highlighted here.
b. State it’s any three advantages.

5 Ananya Ltd is planning to modernise its plant with the latest technology. The company 4
does not have sufficient money. The finance manager plans to arrange money for 3 years
as after three years the company is expecting a good return from their previous investment.
The finance manager does not want to spend flotation costs and does not want to approach
the stock exchange.
a. Identify the source of business finance being described in the above case.
b. How can companies approach the public without spending on floatation costs?
c. Give any two limitations of the source of business finance as identified in the above case.

6 Greentech paints India has started preliminary work for expansion of water based paint and resin 6
manufacturing plant in Goa with the amount available in the general reserves of the company.
The board of directors of Greentech paints India has decided to install a new water based paints
plant with a capacity of about 1 Lakh tonnes per annum in South India at an estimated cost of
rupees five crore, but are unable to decide whether to issue equity shares or debentures for this
purpose. As a finance manager of the company you are required to advise the directors to raise
money through issue of equity shares or debentures of the aforesaid purpose.

7 Shoppers Stop has opened a new retail outlet in Patna. It offers a wide variety of products; 6
classified into well-defined units each one is confined to one kind of product to satisfy every
customer’s need under one roof. It purchases goods directly from the manufacturers and thus
eliminates middlemen. On the basis of the given information about Shoppers Stop, answer the
following questions:
a. Identify the types of large scale retail outlets by quoting the lines from above case.
b. State five features of such a type of retail outlet.

Page 2 of 2