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Business Studies · 2025 · 3 marks
CBSE 2025 · Region 1 · 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 affect the fixed capital
requirements 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 by
spelling out detailed objectives for various business segments.
OR
Factors affecting Requirement of Fixed Capital
:
(i) Nature of business affects the fixed capital requirement as a
trading concern needs lower investment in fixed assets
compared with a manufacturing organisation.
(ii)
Scale of operation affects the fixed capital requirement 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 affects the fixed capital
requirement as a capital intensive organisation requires higher
investment in plant and machinery, whereas a labour intensive
organisation requires less investment in fixed assets.
(iv)
Industries requiring technology upgradation need a higher
investment in fixed assets as their assets become obsolete
sooner and need to be replaced faster.
(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)
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.
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CBSE Class 12 Business Studies past-paper question from the 2025 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.