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Assertion… (Class 12 Business Studies SQP 2026-27, Q10)

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Business StudiesCBSE Class 12 · Sample paper, session 2026-27 · 1 mark · Assertion-reason

CBSE Class 12 Business Studies sample paper 2026-27: question 10

From the official CBSE sample question paper for 2026-27, section A, question 10, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q10 · 1 mark · Assertion-reasonCompetency-basedFinancial Management

Assertion (A): Capital budgeting decisions have a long-term impact on the profitability and growth of a business.

Reason (R): Capital budgeting decisions deal only with short-term revenue expenditures.

Choose the correct options:

  1. (A)Both A and R are true and R is the correct explanation of A.
  2. (B)Both A and R are true but R is not the correct explanation of A.
  3. (C)A is true but R is false.
  4. (D)A is false but R is true.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2026-27.

Hints

Open one hint at a time and try again before the next.

Hint 1

Are capital budgeting decisions short-term or long-term?

Hint 2

Revenue expenditure relates to working capital, not capital budgeting.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Assertion: True. Capital budgeting decisions involve large amounts in long-term (fixed) assets and affect the earning capacity and growth of the business over the long run.

    Reason: False. Capital budgeting deals with long-term capital expenditure, not short-term revenue expenditure.

  2. A is true but R is false. Option (C).

    1 mark

Answer: (C) A is true but R is false.

Where the marks are

  • Truth of A and R and the link between them (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Financial Management, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2026-27: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.