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Business Studies · 2023 · 3 marks
CBSE 2023 · Region 2 · Set 1 · Q24
(a) State any three points of importance of Financial Planning.
(a)
State any three points of importance of Financial
Planning.
OR
(b)
State any three factors that determine the
requirement of fixed capital of a company.
Marking-scheme solution
Importance of Financial Planning :
(i)
It helps in forecasting what may happen in future
under different situations and face the eventual situation
in a better way.
(ii)
It helps in avoiding business shocks and surprises
and helps the company in preparing for the future.
(iii)
It helps in co-ordinating various business functions,
like sales and production functions, by providing clear
policies and procedures.
(iv)
It helps to reduce waste, duplication of efforts and
gaps in planning.
(v)
It tries to link the present with the future.
(vi)
It provides a link between investment and financing
decisions on a continuous basis.
(vii)
It makes the evaluation of actual performance
easier.
OR
Factors affecting Requirement of Fixed Capital
:
(i) Nature of business as a trading concern needs lower
investment in fixed assets compared with a
manufacturing organisation.
(ii)
Scale of operation as a large organisation operating
at a higher scale needs higher investment in fixed assets
as compared to a small organisation.
(iii)
The choice of technique is a factor affecting
requirement of fixed capital as a capital- intensive
organisation requires higher investment in plant,
whereas a labour-intensive organisation requires less
investment in fixed assets.
(iv)
Higher investment in fixed assets may be required
in certain industries where assets become obsolete
sooner and need to be replaced faster due to technology
upgradation.
(v)
Higher growth of an organisation generally requires
higher investment in fixed assets, consequently larger
fixed capital.
(vi)
With diversification, fixed capital requirement
increases as more investment is to be made in fixed
assets.
(vii)
The financing alternatives affect the requirement of
fixed capital as availability of leasing facilities may
reduce the funds required to be invested in fixed assets
as compared to buying an asset.
(viii)
Collaboration reduces the level of investment in
fixed assets as organisations share each other’s
facilities.
Asked in 2 different years
- 2023 · Region 2 · Set 1 · Q24
- 2026 · Region 5 · Set 1 · Q22
- 2026 · Region 5 · Set 2 · Q23
- 2026 · Region 5 · Set 3 · Q21
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Asked in 2023 & 2026. CBSE Class 12 Business Studies past-paper question from the 2023 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.