Apna CareerApna CareerApna Career
CBSE PRACTICE PAPER 2026–27 · BUSINESS STUDIES (SET – 5)
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. Coordination is called the essence of management because it
(a) is a separate function performed after controlling(b) integrates individual efforts and the functions of management towards common goals(c) is required only at the top level of management(d) ensures that every employee has only one superior
2. A firm completes a project within the budget and on time, but the product does not meet the needs of its customers. The firm is
(a) effective but not efficient(b) both efficient and effective(c) efficient but not effective(d) neither efficient nor effective
3. In a hospital, every nurse receives orders from only one senior and reports to that senior alone. Which principle of Henri Fayol is followed?
(a) Unity of command(b) Unity of direction(c) Centralisation(d) Discipline
4. A manager organises a get-together every month so that employees work as one team and are not divided by rank or department. The principle of Fayol applied is
(a) Scalar chain(b) Order(c) Equity(d) Esprit de corps
5. A factory had to change its working hours and wage structure after the government introduced new labour codes. This change relates to which dimension of the business environment?
(a) Economic dimension(b) Social dimension(c) Legal dimension(d) Technological dimension
6. Which one of the following limitations of planning can be reduced best by preparing contingency plans?
(a) Planning may not work in a dynamic environment(b) Planning is a time-consuming process(c) Planning reduces creativity of managers(d) Planning involves huge costs
7. Which element of delegation refers to the obligation of a subordinate to perform the duty assigned to him?
(a) Authority(b) Responsibility(c) Accountability(d) Decentralisation
8. Which type of test in selection measures the potential of a candidate to learn a new skill?
(a) Intelligence test(b) Personality test(c) Trade test(d) Aptitude test
9. A company displays the photograph of the “Employee of the Month” at its reception along with a certificate. Which non-financial incentive is this?
(a) Status(b) Job security(c) Employee recognition programme(d) Organisational climate
10. The sales head receives a report only when monthly sales fall short of the target by more than 10%. This is an application of
(a) management by exception(b) critical point control(c) budgetary control(d) ratio analysis
11. A company earns 15% on its total investment while its debentures carry 9% interest. It raises more debt and its EPS increases. This is called
(a) operating leverage(b) capital budgeting(c) financial planning(d) trading on equity
12. A reputed company needs ₹ 25 crore for 90 days to meet urgent working-capital needs. Which of the following is the most suitable source?
(a) Debentures(b) Commercial paper(c) Equity shares(d) Preference shares
13. A company first studies what consumers want and then produces goods to satisfy those needs at a profit. Which marketing philosophy does it follow?
(a) Production concept(b) Product concept(c) Marketing concept(d) Selling concept
14. Which of the following is a responsibility of a consumer?
(a) Seeking compensation for unfair trade practices(b) Asking for a cash memo for every purchase(c) Choosing from a variety of products(d) Being protected against hazardous goods
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): Planning is a pervasive function of management.
Reason (R): Planning is a mental exercise that requires logical thinking and imagination rather than guesswork.
Reason (R): Planning is a mental exercise that requires logical thinking and imagination rather than guesswork.
16. Assertion (A): The right to choose means that a consumer must buy only branded goods.
Reason (R): The right to choose assures consumers access to a variety of goods and services at competitive prices.
Reason (R): The right to choose assures consumers access to a variety of goods and services at competitive prices.
SECTION B (4 × 3 = 12 Marks) — Short Answer Questions
17. “TastyBites”, a restaurant chain, wants its managers to understand that management is multi-dimensional. Explain the three dimensions of management with reference to TastyBites.(3)
18. Explain any three points of importance of staffing.(3)
19. Explain any three methods of floating new issues in the primary market.(3)
20. “NutriMix”, a breakfast-cereal company, wants to print a label on its pack. Explain any three functions that the label will perform.(3)
SECTION C (3 × 4 = 12 Marks) — Short Answer Questions
21. Explain briefly the functions of top level, middle level and lower (supervisory) level of management.(4)
22. Identify the element of directing involved in each situation, with a reason : (i) A supervisor guides workers during the shift and checks their daily output; (ii) A company gives bonuses and public praise to raise the morale of its staff; (iii) The CEO inspires employees by his vision and personal example and makes them follow him willingly; (iv) The HR head sends a circular to all employees about the new leave policy.(4)
23. A company has equity of ₹ 15,00,000 and debt of ₹ 5,00,000. It needs ₹ 10,00,000 more and has two options : Plan P – issue equity shares for the whole amount; Plan Q – raise the whole amount as a loan. (a) Calculate the debt–equity ratio before the new funds and (b) after the funds under Plan P and under Plan Q. (c) Which plan will increase the financial risk and why?(4)
SECTION D (4 × 5 = 20 Marks) — Long Answer Questions
24. Identify the principle of management (given by Henri Fayol) followed in each situation at “BrightLearn”, a coaching institute : (i) The director divides subjects among teachers according to their expertise so that each teacher handles one subject only; (ii) The head of a department is given power to approve study-material purchases up to a fixed limit, matching her responsibility for exam results; (iii) The institute pays salaries that are fair to both the institute and the teachers, and gives a bonus for good results; (iv) The institute avoids unnecessary removal and transfer of good teachers, so they do not fear losing their jobs; (v) The director treats all teachers with kindness and fairness in leave and promotion matters.(5)
25. Explain the elements of the communication process (any five).(5)
26. “Planning and controlling are inseparable.” Explain any five points to support the statement.(5)
27. Explain any five points showing the importance of consumer protection from the point of view of business.(5)
SECTION E (2 × 6 = 12 Marks) — Long Answer Questions
28. “BharatAuto” manufactures two-wheelers, cars and trucks and plans to double its sales in five years. Compare the functional and the divisional structures on any four points and advise, with two reasons, which structure suits BharatAuto.(6)
OR
Explain any six features of the business environment, with one example for each.
29. Distinguish between primary market and secondary market on any six points.(6)
OR
Distinguish between capital market and money market on any six points.
SECTION F (2 × 4 = 8 Marks) — Case-Based Questions
30. Read the case and answer the questions.
“SolarNest”, a start-up, manufactures and installs solar rooftop panels. After the government announced a subsidy scheme and electricity tariffs began to rise, demand increased sharply. The company set a target of 5,000 installations in the next three years. It also made a rule : “No installation will start without a structural-safety check; there are no exceptions.” In the second year, the subsidy was suddenly reduced and the company found that its plan no longer worked.
“SolarNest”, a start-up, manufactures and installs solar rooftop panels. After the government announced a subsidy scheme and electricity tariffs began to rise, demand increased sharply. The company set a target of 5,000 installations in the next three years. It also made a rule : “No installation will start without a structural-safety check; there are no exceptions.” In the second year, the subsidy was suddenly reduced and the company found that its plan no longer worked.
(i) Identify any two dimensions of the business environment mentioned in the case. (1)
(ii) Name the type of plan represented by the target of 5,000 installations. (1)
(iii) Name the type of plan represented by the safety-check statement. (1)
(iv) Identify the limitation of planning shown by the sudden reduction of subsidy and state one way to reduce its effect. (1)
(4)31. Read the case and answer the questions.
“ZestCafe” launches cold-brew coffee in bottles. To capture the market quickly, it fixes a price lower than that of its competitors. The bottles are sold through large supermarkets and also directly to customers through the company’s own mobile app. For promotion, the company plays jingles on the radio and gives discount coupons on the first purchase.
“ZestCafe” launches cold-brew coffee in bottles. To capture the market quickly, it fixes a price lower than that of its competitors. The bottles are sold through large supermarkets and also directly to customers through the company’s own mobile app. For promotion, the company plays jingles on the radio and gives discount coupons on the first purchase.
(i) Identify the pricing objective followed by ZestCafe. (1)
(ii) Name the channel of distribution used when ZestCafe sells directly through its own app. (1)
(iii) Identify the two elements of the promotion mix mentioned in the case. (1)
(iv) Suggest one more element of the promotion mix that can help the company to build trust among customers, with a reason. (1)
(4)ANSWER KEY & MARKING RUBRIC · BUSINESS STUDIES PRACTICE PAPER (SET – 5)
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 | (b) | Q.2 | (c) | Q.3 | (a) | Q.4 | (d) |
| Q.5 | (c) | Q.6 | (a) | Q.7 | (b) | Q.8 | (d) |
| Q.9 | (c) | Q.10 | (a) | Q.11 | (d) | Q.12 | (b) |
| Q.13 | (c) | Q.14 | (b) | Q.15 | (b) | Q.16 | (d) |
Reasoning for Q.1–16. (1) Coordination binds all functions and integrates efforts ⇒ essence of management. (2) Work within budget and time ⇒ efficient; failing to meet customer needs ⇒ not effective. (3) One senior for each employee ⇒ unity of command. (4) Team feeling across ranks and departments ⇒ esprit de corps. (5) New labour codes ⇒ legal dimension. (6) A contingency (alternative) plan prepares the firm for a changing environment. (7) Responsibility is the obligation to perform the assigned duty; authority is the right, accountability is answerability. (8) An aptitude test measures latent potential to learn; a trade test measures existing skill. (9) Photograph and certificate ⇒ employee recognition programme. (10) Only the deviations beyond 10% are reported ⇒ management by exception. (11) ROI (15%) > interest (9%) ⇒ EPS rises ⇒ trading on equity. (12) A short-term need of 90 days by a reputed company ⇒ commercial paper. (13) Consumer needs first, then production ⇒ marketing concept. (14) Insisting on a cash memo is a consumer’s responsibility; the others are rights. (15) (b) : both true, but R does not explain A (pervasiveness means planning is needed at all levels). (16) (d) : A is false (the right to choose does not compel branded goods); R is true.
SECTION B — Marking Rubric (3 marks each)
17.
Dimension (½) + application to TastyBites (½) for each.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Management of work | Work is converted into goals and tasks, with methods and resources fixed (e.g. setting daily targets for orders, menu and kitchen layout) | 1 |
| Management of people | Getting work done through people while meeting their needs (e.g. hiring, training and motivating chefs and waiters) | 1 |
| Management of operations | Process of converting inputs into outputs (e.g. buying raw materials, cooking, serving) in the best possible way | 1 |
18.
Any three points.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Point 1 | Right people for the right job – competent personnel are filled in all positions | 1 |
| Point 2 | Higher performance – right selection, training and appraisal raise productivity | 1 |
| Point 3 | Any one : continuous survival and growth through succession planning; optimum utilisation of human resources (avoids over-staffing/under-staffing); job satisfaction and morale through fair compensation and development | 1 |
19.
Any three methods, each explained.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Method 1 | Public issue – shares are offered to the general public through a prospectus (IPO/FPO) | 1 |
| Method 2 | Rights issue – new shares offered first to existing shareholders in a fixed ratio | 1 |
| Method 3 | Any one : private placement (sale to institutions/selected investors); offer for sale (through issue houses/merchant bankers); e-IPO (online through the stock exchange) | 1 |
20.
Any three functions, each linked to NutriMix.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Function 1 | Describes the product and specifies its contents (ingredients, weight, how to use) | 1 |
| Function 2 | Identification of the product/brand among competing cereals | 1 |
| Function 3 | Any one : grading of the product; helps in promotion through attractive design; provides information required by law (MRP, expiry date, nutrition facts) | 1 |
SECTION C — Marking Rubric (4 marks each)
21.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Top level | Determines overall objectives, policies and strategies; assembles resources; coordinates all departments; is responsible for the welfare and survival of the enterprise (Board of Directors, CEO) | 1½ |
| Middle level | Links top and lower levels; interprets and implements top-level policies; prepares departmental plans; assembles staff; motivates lower-level managers (departmental heads) | 1½ |
| Lower/supervisory level | Directly oversees workers; ensures that work is done as planned; maintains discipline and quality; communicates problems to higher levels (foremen, supervisors) | 1 |
22.
Element (½) + reason (½) for each.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) | Supervision – watching and guiding the workers at work | 1 |
| (ii) | Motivation – bonus (financial) and praise (non-financial) stimulate people to work | 1 |
| (iii) | Leadership – influencing people to follow willingly | 1 |
| (iv) | Communication – passing information to employees | 1 |
23.
(Calculation 4 marks) (a) 5,00,000 ÷ 15,00,000 = 0.33 : 1 (1); (b) Plan P : 5,00,000 ÷ 25,00,000 = 0.20 : 1 (1); Plan Q : 15,00,000 ÷ 15,00,000 = 1 : 1 (1). (c) Plan Q (1) raises the financial risk – a higher debt–equity ratio means a larger fixed interest burden that must be paid whatever the profit.
| Particulars | Before (₹) | Plan P (₹) | Plan Q (₹) |
|---|---|---|---|
| Equity (shareholders’ funds) | 15,00,000 | 25,00,000 | 15,00,000 |
| Debt | 5,00,000 | 5,00,000 | 15,00,000 |
| Debt–equity ratio | 0.33 : 1 (1 : 3) | 0.20 : 1 (1 : 5) | 1 : 1 |
SECTION D — Marking Rubric (5 marks each)
24.
Principle (½) + reason (½) for each.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) One subject per teacher | Division of work – specialisation increases efficiency | 1 |
| (ii) Power matched with responsibility | Authority and responsibility – authority must be commensurate with responsibility | 1 |
| (iii) Fair salary and bonus | Remuneration of employees – fair to both employees and the organisation | 1 |
| (iv) No unnecessary removal | Stability of tenure – employee security reduces turnover | 1 |
| (v) Kindness and fairness | Equity – kindness and justice produce loyalty and devotion | 1 |
25.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five elements | (1) Sender – the person who conveys the message; (2) Message – the idea, feeling or information; (3) Encoding – converting the message into words, symbols or gestures; (4) Media – the channel (written, oral, e-mail); (5) Decoding – converting the symbols into meaning; (6) Receiver – the person for whom the message is meant; (7) Feedback – the receiver’s response; (8) Noise – any obstruction that distorts the message | 5 (name ½ + explanation ½ for each; a labelled diagram may be credited) |
26.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Point 1 | Planning provides the base for controlling – it sets the standards against which performance is compared | 1 |
| Point 2 | Controlling provides feedback for future planning – deviations reveal faulty plans | 1 |
| Point 3 | Planning is forward looking; controlling is backward looking – but controlling also helps to improve future plans | 1 |
| Point 4 | Planning without controlling is meaningless (no check on execution), and controlling without planning is blind (no standards) | 1 |
| Point 5 | Both are pervasive and continuous – they operate at all levels and are repeated in every cycle, so they are called “twins” | 1 |
27.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five points | (1) Long-term interest of the business – satisfied customers bring repeat sales; (2) Business uses society’s resources, so it owes service to consumers; (3) Social responsibility towards consumers; (4) Moral justification – no cheating of the weaker party; (5) Government intervention – businesses violating the law face penalties; (6) Good image and goodwill in the market | 5 (point ½ + explanation ½ for each) |
SECTION E — Marking Rubric (6 marks each)
28.
(Any four bases, 1 mark each = 4)
Advice (2) : Divisional structure suits BharatAuto because (1) it makes product specialisation possible for the three different vehicles, and (2) it allows profit responsibility to be fixed and easy expansion by adding divisions. (1 mark for the choice with one reason, 1 for the second reason)
OR
| Basis | Functional structure | Divisional structure |
|---|---|---|
| Formation | Grouping of jobs by functions (production, marketing, finance) | Grouping by products/regions (two-wheelers, cars, trucks) |
| Specialisation | Occupational specialisation | Product specialisation |
| Responsibility | Difficult to fix for profit/loss | Easy to fix profit responsibility on a division |
| Cost | Economical – no duplication of functions | Costly – functions are duplicated in each division |
| Coordination | Difficult across functions | Easy within a division, but difficult across divisions |
| Suitability | Large size with one or few products | Many products/diverse activities, expansion |
Advice (2) : Divisional structure suits BharatAuto because (1) it makes product specialisation possible for the three different vehicles, and (2) it allows profit responsibility to be fixed and easy expansion by adding divisions. (1 mark for the choice with one reason, 1 for the second reason)
OR
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any six features | (1) Totality of external forces (e.g. all outside forces together); (2) Specific and general forces (e.g. customers vs. social change); (3) Inter-relatedness (e.g. rising income affects demand for cars and fuel); (4) Dynamic nature (e.g. new technology); (5) Uncertainty (e.g. fashion and demand shifts); (6) Relativity (e.g. impact differs by country/region); (7) Complexity (many interacting forces) | 6 (feature ½ + example ½ for each) |
29.
(Any six points, 1 mark each)
OR
(Any six points, 1 mark each)
| Basis | Primary market | Secondary market |
|---|---|---|
| Meaning | Market where new securities are issued for the first time | Market where existing securities are bought and sold |
| Purpose | Raises fresh capital for the company | Provides liquidity to investors |
| Role in capital formation | Direct | Indirect |
| Price determination | Price fixed by the company (issue price) | Price decided by demand and supply |
| Place | No fixed place | Stock exchange (fixed place) |
| Intermediaries | Underwriters, merchant bankers, registrars | Brokers and sub-brokers |
OR
| Basis | Capital market | Money market |
|---|---|---|
| Participants | Financial institutions, banks, corporate bodies, foreign investors, retail investors | RBI, banks, financial institutions, large corporate houses |
| Instruments | Shares, debentures, bonds | Treasury bills, commercial paper, call money, certificate of deposit |
| Duration | Long term (more than one year) | Short term (up to one year) |
| Liquidity | Comparatively lower | Highly liquid |
| Return | Higher expected return | Lower expected return |
| Safety | Comparatively riskier | Comparatively safer |
SECTION F — Marking Rubric (4 marks each)
30.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) | Any two : political/legal (government subsidy scheme) and economic (rising electricity tariffs) | 1 (½ + ½) |
| (ii) | Objective (the end-point of the plan) | 1 |
| (iii) | Rule (a specific, rigid statement; no deviation allowed) | 1 |
| (iv) | Planning may not work in a dynamic environment (½); reduced by flexible plans/contingency plans and regular review (½) | 1 |
31.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) | Market share leadership (a low price to capture the market quickly) | 1 |
| (ii) | Direct (zero-level) channel – no intermediary between the company and the consumer | 1 |
| (iii) | Advertising (radio jingles) and sales promotion (discount coupons) | 1 (½ + ½) |
| (iv) | Any one : public relations/publicity (positive media stories and events build credibility) or personal selling (face-to-face explanation of quality builds trust) | 1 (name ½ + reason ½) |
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 |
