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CBSE PRACTICE PAPER 2026–27 · BUSINESS STUDIES (SET – 4)
General Instructions
- This question paper contains 31 questions. All questions are compulsory. (Theory : 80 marks; Project : 20 marks is assessed separately.)
- Section A : Q. 1 to 14 are MCQs and Q. 15–16 are Assertion–Reason questions, 1 mark each (16 marks).
- Section B : Q. 17 to 20 are short answer questions of 3 marks each (12 marks). Answer in about 60–80 words.
- Section C : Q. 21 to 23 are short answer questions of 4 marks each (12 marks). Answer in about 80–100 words.
- Section D : Q. 24 to 27 are long answer questions of 5 marks each (20 marks). Answer in about 120 words.
- Section E : Q. 28 and Q. 29 are long answer questions of 6 marks each (12 marks). Answer in about 150 words.
- Section F : Q. 30 and Q. 31 are case-based questions of 4 marks each, with four sub-parts of 1 mark each (8 marks).
- The paper follows the CBSE 2025–26 design : Part A (Principles and Functions of Management) 50 marks and Part B (Business Finance and Marketing) 30 marks; typology 40% remembering/understanding, 30% applying, 30% analysing/evaluating. Internal choice (OR) is provided in some questions.
- The paper is of higher difficulty level and is competency based : questions are set in real-life situations that test application, analysis and evaluation. A detailed marking rubric and Answer Key are given at the end of this paper.
SECTION A (16 × 1 = 16 Marks)
Q. 1 to Q. 14 : Multiple Choice Questions (choose the correct option)
1. Which of the following shows that management is an art?
(a) Creative and personalised application of knowledge(b) Principles are based on repeated experiments(c) Principles have a universal cause-and-effect relationship(d) Members follow a code of conduct
2. Functional foremanship, a technique of F. W. Taylor, goes against which principle of Henri Fayol?
(a) Unity of direction(b) Equity(c) Unity of command(d) Order
3. A packing unit gives workers rest intervals after fixed working hours to reduce tiredness and raise output. Which technique of scientific management is applied?
(a) Method study(b) Motion study(c) Time study(d) Fatigue study
4. Taylor’s principle of “mental revolution” requires a change in the attitude of
(a) workers only(b) both workers and management(c) management only(d) customers and suppliers
5. Growing health awareness has increased the demand for organic food. This change is related to which dimension of the business environment?
(a) Social dimension(b) Economic dimension(c) Legal dimension(d) Technological dimension
6. A company is at the stage of selecting one of three alternative ways of entering a new city. Which step of the planning process comes immediately before this?
(a) Setting objectives(b) Developing premises(c) Evaluating alternative courses of action(d) Following up the action
7. Which of the following is a single-use plan?
(a) Policy(b) Budget(c) Rule(d) Procedure
8. Training differs from development because training is
(a) career-oriented, while development is job-oriented(b) meant only for managers, while development is for workers(c) a long-term process, while development is a short-term process(d) job-oriented, while development is career-oriented
9. A manager takes all decisions himself, gives no freedom to his subordinates and expects them to follow his orders strictly. His leadership style is
(a) autocratic(b) democratic(c) laissez-faire(d) charismatic
10. A company monitors only the key result areas such as sales growth and net profit instead of every activity. This is called
(a) management by exception(b) budgetary control(c) critical point control(d) personal observation
11. Which of the following companies can safely use more debt in its capital structure?
(a) A company with fluctuating earnings(b) A company with stable and predictable earnings(c) A company with a weak cash-flow position(d) A company with a low debt-servicing capacity
12. Arrange the steps of trading in securities on a stock exchange in the correct order : (i) placing the order; (ii) selecting a broker; (iii) settlement; (iv) executing the order.
(a) (i), (ii), (iii), (iv)(b) (ii), (iv), (i), (iii)(c) (i), (iv), (ii), (iii)(d) (ii), (i), (iv), (iii)
13. Which element of the promotion mix is a paid, impersonal form of mass communication through media such as television and newspapers?
(a) Advertising(b) Personal selling(c) Sales promotion(d) Public relations
14. Which quality-certification mark is used on agricultural products such as honey and spices?
(a) ISI mark(b) Hallmark(c) Agmark(d) Eco mark
Q. 15 and Q. 16 : Assertion–Reason Questions
Options: (a) Both A and R are true and R is the correct explanation of A. (b) Both A and R are true but R is not the correct explanation of A. (c) A is true but R is false. (d) A is false but R is true.
15. Assertion (A): A functional structure may lead to conflicts between departments.
Reason (R): Each department tends to give more importance to its own goals than to the goals of the organisation.
Reason (R): Each department tends to give more importance to its own goals than to the goals of the organisation.
16. Assertion (A): Consumer organisations help consumers to understand their rights.
Reason (R): Recognised consumer organisations can file complaints on behalf of consumers.
Reason (R): Recognised consumer organisations can file complaints on behalf of consumers.
SECTION B (4 × 3 = 12 Marks) — Short Answer Questions
17. Explain any three features of management as an art, with an example from a bakery chain “SweetTreat” for each.(3)
18. Explain any three benefits of training to an organisation.(3)
19. Explain any three points of importance of financial planning.(3)
20. Explain, with an example for each, any three methods of sales promotion that a sports-shoe company can use to increase its sales in the festive season.(3)
SECTION C (3 × 4 = 12 Marks) — Short Answer Questions
21. Explain the organisational, social and personal objectives of management, with one example for each (organisational objectives have three parts).(4)
22. Identify the step of the selection process in each situation : (i) The HR department rejects the applications of candidates who do not have the minimum qualification; (ii) Candidates are asked to solve a set of numerical and reasoning questions; (iii) A panel discusses the candidate’s experience and views face to face; (iv) The company contacts the candidate’s previous employer to verify his record.(4)
23. A company has a net profit after tax of ₹ 12,00,000 and 2,00,000 equity shares. It pays a dividend of ₹ 3 per share. Calculate (a) the EPS, (b) the total dividend paid, and (c) the retained earnings and the percentage of profit retained. (d) State one reason why the company may decide to retain a larger part of its profit.(4)
SECTION D (4 × 5 = 20 Marks) — Long Answer Questions
24. A hospital “MedLife” faces problems : doctors, nurses and the laboratory work towards different targets, instructions reach late and departments blame each other. Explain any five features of coordination that the hospital’s management should keep in mind, with an example from the hospital for each.(5)
25. Explain any five points of importance of motivation.(5)
26. Explain any five techniques of managerial control.(5)
27. Explain any five factors that affect the choice of channels of distribution.(5)
SECTION E (2 × 6 = 12 Marks) — Long Answer Questions
28. Examine, with reference to a firm “QuickBite” planning to start an online food-delivery business, any six steps of the planning process.(6)
OR
Explain any six points of importance of organising.
29. Examine any six factors that affect the requirement of fixed capital of a business.(6)
OR
Examine any six factors that affect the dividend decision of a company.
SECTION F (2 × 4 = 8 Marks) — Case-Based Questions
30. Read the case and answer the questions.
“SpiceRoute Foods” has 40 branches across the country. Earlier, the head office decided everything, including the local price of tea and the recruitment of branch staff, which caused long delays. The Managing Director has now allowed the branch managers to decide local prices and to recruit staff up to a fixed limit. However, he has made it clear that each branch manager must report monthly results to him, and that he remains answerable to the Board for the overall results. The branches are now grouped region-wise, each with its own profit target.
“SpiceRoute Foods” has 40 branches across the country. Earlier, the head office decided everything, including the local price of tea and the recruitment of branch staff, which caused long delays. The Managing Director has now allowed the branch managers to decide local prices and to recruit staff up to a fixed limit. However, he has made it clear that each branch manager must report monthly results to him, and that he remains answerable to the Board for the overall results. The branches are now grouped region-wise, each with its own profit target.
(i) Identify the concept followed by SpiceRoute Foods when authority was given to branch managers at all levels. (1)
(ii) State one benefit of this concept to the company. (1)
(iii) Name the element of delegation that the Managing Director cannot pass on to the branch managers. (1)
(iv) Name the type of organisational structure formed when the branches are grouped region-wise with separate profit targets. (1)
(4)31. Read the case and answer the questions.
Neha bought a pressure cooker carrying an ISI mark from “HomeNeeds”. While she was cooking, the cooker burst and she suffered burn injuries. The shop refused to take responsibility, saying that it only sold the goods. Neha contacted a local consumer organisation, “JagoGrahak”, which helped her to file a complaint before the District Consumer Commission, with the cash memo as proof of purchase. Later it was found that the ISI mark on the cooker was fake.
Neha bought a pressure cooker carrying an ISI mark from “HomeNeeds”. While she was cooking, the cooker burst and she suffered burn injuries. The shop refused to take responsibility, saying that it only sold the goods. Neha contacted a local consumer organisation, “JagoGrahak”, which helped her to file a complaint before the District Consumer Commission, with the cash memo as proof of purchase. Later it was found that the ISI mark on the cooker was fake.
(i) Identify the consumer right that was violated when the cooker burst. (1)
(ii) Identify the unfair trade practice followed by the manufacturer. (1)
(iii) Name the consumer responsibility that helped Neha to prove her case. (1)
(iv) State one role of the consumer organisation shown in the case. (1)
(4)ANSWER KEY & MARKING RUBRIC · BUSINESS STUDIES PRACTICE PAPER (SET – 4)
Note for evaluators : Marks are awarded against the rubric criteria below. Award marks for any other relevant and correct point. Credit is given for the application of the concept to the situation (competency) and not only for recall of definitions.
SECTION A — Answer Key (1 mark each)
| Q.1 | (a) | Q.2 | (c) | Q.3 | (d) | Q.4 | (b) |
| Q.5 | (a) | Q.6 | (c) | Q.7 | (b) | Q.8 | (d) |
| Q.9 | (a) | Q.10 | (c) | Q.11 | (b) | Q.12 | (d) |
| Q.13 | (a) | Q.14 | (c) | Q.15 | (a) | Q.16 | (b) |
Reasoning for Q.1–16. (1) Creative, personalised application of knowledge is the feature of an art; the other options describe a science or a profession. (2) Under functional foremanship a worker gets orders from eight specialists, which violates unity of command. (3) Rest intervals to reduce tiredness ⇒ fatigue study. (4) Mental revolution means a change in attitude of both workers and management. (5) Health awareness is a change in people’s attitudes ⇒ social dimension. (6) The sequence is : evaluating alternatives ⇒ selecting an alternative. (7) A budget is a single-use plan; policy, rule and procedure are standing plans. (8) Training is job-oriented; development is career-oriented. (9) All decisions by the manager ⇒ autocratic. (10) Monitoring only the key result areas ⇒ critical point control. (11) Stable and predictable earnings give the capacity to pay fixed interest regularly. (12) Select a broker ⇒ place the order ⇒ the order is executed ⇒ settlement : (ii), (i), (iv), (iii). (13) Paid, impersonal mass communication ⇒ advertising. (14) Agmark is used for agricultural products; ISI mark for industrial goods; Hallmark for gold jewellery. (15) (a) : both true and R explains A. (16) (b) : both true, but R does not explain A (educating consumers and filing complaints are two separate roles).
SECTION B — Marking Rubric (3 marks each)
17.
Feature (½) + example (½) for each.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Feature 1 | Existence of theoretical knowledge – principles of baking, inventory and retail management are available in books (e.g. standard recipes and stock norms) | 1 |
| Feature 2 | Personalised application – each manager applies the knowledge in his own way (e.g. different store layouts and festive offers) | 1 |
| Feature 3 | Based on practice and creativity – skill improves with experience and new ideas (e.g. a new product flavour or display style) | 1 |
18.
Any three benefits.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Benefit 1 | Higher productivity and better quality of work | 1 |
| Benefit 2 | Less wastage of material and fewer accidents; machines are used properly | 1 |
| Benefit 3 | Any one : less supervision is needed; higher morale and lower turnover; a pool of trained people is ready for higher positions; helps in adapting to new technology | 1 |
19.
Any three points.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Point 1 | Ensures availability of funds when they are required | 1 |
| Point 2 | Avoids business shocks and surprises – by forecasting future needs and preparing for them | 1 |
| Point 3 | Any one : helps in avoiding wastage and duplication through coordination; links present and future financing plans; avoids over-capitalisation and under-capitalisation | 1 |
20.
Any three methods with an example each.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Method 1 | e.g. Rebate / discount – special price reduction during the festive season | 1 |
| Method 2 | e.g. Product combination / quantity gift – a pair of socks free with a pair of shoes | 1 |
| Method 3 | e.g. Contests / lucky draw, sampling, instant draw and gift, refund or usable benefit (any one) | 1 |
SECTION C — Marking Rubric (4 marks each)
21.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Organisational objectives (2) | Survival (earning enough revenue to cover costs); profit (to meet expenses and risks); growth (expansion of sales, assets and employment). Any two parts with an example, 1 mark each (or all three, with the full 2 marks) | 2 |
| Social objectives (1) | Creating benefits for society – e.g. employing the weaker sections, supplying good quality at fair prices, using pollution-free technology | 1 |
| Personal objectives (1) | Fulfilling the needs of the employees – e.g. fair pay, job satisfaction, a chance for personal growth | 1 |
22.
Each step with a reason.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) | Preliminary screening | 1 |
| (ii) | Selection tests (aptitude/intelligence tests) | 1 |
| (iii) | Employment interview | 1 |
| (iv) | Reference and background checks | 1 |
23.
(Calculation 3, 1 each for (a), (b), (c)) (d) (1) Any one : good growth opportunities (funds are needed for expansion); an uncertain cash position; need for a stable reserve; or a wish to avoid the cost of raising new capital.
| Particulars | Amount |
|---|---|
| Net profit after tax (₹) | 12,00,000 |
| No. of equity shares | 2,00,000 |
| (a) EPS = 12,00,000 ÷ 2,00,000 | ₹ 6 |
| (b) Total dividend = 2,00,000 × ₹ 3 | 6,00,000 |
| (c) Retained earnings = 12,00,000 − 6,00,000 | 6,00,000 |
| Percentage of profit retained = 6,00,000 ÷ 12,00,000 × 100 | 50% |
SECTION D — Marking Rubric (5 marks each)
24.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five features | (1) Coordination integrates group efforts – doctors, nurses and the laboratory work towards one patient-care goal; (2) Ensures unity of action – all departments follow one plan; (3) A continuous process – needed through the working of the hospital; (4) All-pervasive – needed at every level and in every department; (5) Responsibility of all managers – not only of the medical superintendent; (6) Deliberate function – the manager must consciously ensure it, e.g. through daily review meetings | 5 (feature ½ + hospital example ½ for each) |
25.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five points | (1) Improves performance – the ability and the willingness together raise results; (2) Changes negative or indifferent attitudes of employees; (3) Reduces absenteeism and employee turnover; (4) Helps in achieving organisational goals; (5) Helps managers to introduce changes smoothly; (6) Leads to better use of resources and higher productivity | 5 (point ½ + explanation ½ for each) |
26.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five techniques | Traditional : (1) personal observation; (2) statistical reports; (3) break-even analysis; (4) budgetary control. Modern : (5) return on investment; (6) ratio analysis; (7) responsibility accounting; (8) management audit; (9) PERT and CPM; (10) management information system | 5 (name ½ + explanation ½ for each) |
27.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five factors | (1) Product – nature, value, perishability; (2) Market – size, geographical concentration, type of customers; (3) Company – financial strength, desire for control; (4) Competition – channels used by rivals; (5) Margin and cost – the cost of the channel and the margin to be paid; (6) Government and legal restrictions | 5 (factor ½ + explanation ½ for each) |
SECTION E — Marking Rubric (6 marks each)
28.
OR
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any six steps | (1) Setting objectives – e.g. 10,000 orders a month in a year; (2) Developing premises – forecasts of demand, fuel prices, rival apps; (3) Identifying alternative courses – own riders or a delivery partner; (4) Evaluating alternatives – cost, risk and returns of each; (5) Selecting an alternative – the best option; (6) Implementing the plan – hiring, marketing and launch; (7) Follow-up action – checking whether the plan is working and correcting | 6 (step ½ + application to QuickBite ½ for each) |
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any six points | (1) Benefits of specialisation; (2) Clarity in working relationships; (3) Optimum utilisation of resources; (4) Adaptation to change; (5) Effective administration; (6) Development of personnel; (7) Expansion and growth | 6 (point ½ + explanation ½ for each) |
29.
OR
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any six factors | (1) Nature of business (a manufacturing firm needs more); (2) Scale of operations; (3) Choice of technique (capital- vs labour-intensive); (4) Technology upgradation; (5) Growth prospects; (6) Diversification; (7) Financing alternatives (leasing reduces the need); (8) Level of collaboration with other firms | 6 (factor ½ + explanation ½ for each) |
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any six factors | (1) Earnings – dividends are paid out of current and past earnings; (2) Stability of earnings; (3) Stability of dividends – the policy of paying a steady dividend; (4) Growth opportunities – more profit is retained for expansion; (5) Cash flow position; (6) Shareholders’ preference; (7) Taxation policy; (8) Stock market reaction; (9) Access to the capital market; (10) Legal and contractual constraints | 6 (factor ½ + explanation ½ for each) |
SECTION F — Marking Rubric (4 marks each)
30.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) | Decentralisation – authority dispersed to all levels | 1 |
| (ii) | Any one : quick decisions; relieves top managers; develops initiative in lower levels; better control; helps in growth | 1 |
| (iii) | Accountability (answerability) cannot be delegated | 1 |
| (iv) | Divisional structure (geographical divisions) | 1 |
31.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) | Right to safety | 1 |
| (ii) | Use of a fake quality mark (false representation of goods/ISI mark) | 1 |
| (iii) | Asking for and keeping a cash memo as proof of purchase | 1 |
| (iv) | Any one : helped the consumer to file a complaint; educated consumers about rights; represented the consumer | 1 |
DESIGN OF THE PAPER — Unit-wise Weightage and Typology (as per CBSE 2025–26)
| Part / Units | Marks (CBSE) | Marks in this paper | Questions |
|---|---|---|---|
| Part A – Units 1–2 : Nature and Significance of Management; Principles of Management | 16 | 16 | Q.1, 2, 3, 4, 17, 21, 24 |
| Units 3–5 : Business Environment; Planning; Organising | 14 | 14 | Q.5, 6, 7, 15, 28, 30 |
| Units 6–8 : Staffing; Directing; Controlling | 20 | 20 | Q.8, 9, 10, 18, 22, 25, 26 |
| Total – Part A | 50 | 50 | |
| Part B – Units 9–10 : Financial Management; Financial Markets | 15 | 15 | Q.11, 12, 19, 23, 29 |
| Units 11–12 : Marketing Management; Consumer Protection | 15 | 15 | Q.13, 14, 16, 20, 27, 31 |
| Total – Part B | 30 | 30 | |
| Grand total | 80 | 80 |
| Typology of questions | Marks (CBSE) | Marks in this paper | Questions |
|---|---|---|---|
| Remembering and Understanding | 32 (40%) | 32 | Q.1, 2, 4, 7, 8, 13, 14, 18, 19, 21, 25, 26, 27 |
| Applying | 24 (30%) | 24 | Q.3, 5, 9, 10, 11, 17, 20, 22, 23, 24 |
| Analysing, Evaluating and Creating | 24 (30%) | 24 | Q.6, 12, 15, 16, 28, 29, 30, 31 |
| Total | 80 (100%) | 80 |
