Financial Management — Business Studies STD 12 Commerce — Question

The Return on Investment (RoI) of a company ranges between 10-12% for the past three years. To finance its future fixed capital needs, it has the following options for borrowing debt.

• Option ‘A’ Rate of interest 9%
• Option 'B' Rate of interest 13%

Which source of debt, 'Option A' or 'Option B', is better? Give reason in support of your answer. Also state the concept being used in taking the decision.

Differentiate between 'method' and 'budget' as types of plans.

What is meant by ‘Selling Concept’ of marketing?

Which principle of management envisages that each group of activities having the same objective, must have one head and one plan? Explain the principle with suitable example.

"Controlling is forward looking". Discuss.

“Shan Spices Ltd.” are the manufacturer of different food specific spices like Rajmaa Masala, Cholley Masala, Aaloo Parantha Masala etc. Mr. Raghav, the owner of the company has created different departments for purchase, production, marketing, finance and human resource. There are thirty employees working in the organisation. Planning is of paramount importance to the company as Mr. Raghav believes that effective planning leads to achievement of organisational objectives. So in order to make employees focus on objectives, he issued instructions that during working hours only official matters will be discussed. He made certain rules and code of conduct for the employees to follow, according to which employees are not allowed to visit and talk to the employees of other departments except for official work. He emphasised on work performance which resulted in smooth functioning of the organisation.

1. Identify and state the type of organisation mentioned in the above para.
2. State one feature of the concept identified in part (a) as mentioned in the above para.
3. What was the purpose behind the formulation of rules for the employees that restricted their personal communication with the employees of other departments ?
4. State two values violated by Mr. Raghav.

Explain ‘Management of People’ as a dimension of management.

Mention any two measures to improve communication effectiveness.

Nishant, the director of a garment company, is planning to manufacture bags for the utilisation of waste material from one of his garment units. He has decided that this manufacturing unit will be set-up in a rural area of Orissa where people have very few job opportunities and labour is available at very low rates. He also thought of giving equal opportunities to men and women.
For this, he wanted four different heads for sales, account, purchase and production. He gave an advertisement and shortlists ten candidates per post after conducting different selection tests.

• Identify and state the next three steps for choosing the best candidate out of the candidates short-listed.
• Also identify two values which Nishant wants to communicate to the society by setting up this manufacturing unit.

Explain any two reasons why proper understanding of management principles is necessary.