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Delicious… (Class 12 Business Studies SQP 2026-27, Q17)

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

CBSE Class 12 Business Studies sample paper 2026-27: question 17

From the official CBSE sample question paper for 2026-27, section A, question 17, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q17 · 1 mark · MCQCompetency-basedFinancial Management

Delicious Beverages Ltd. is a company manufacturing packaged fruit juices. Initially, the company enjoyed a monopoly in the local market, and customers readily bought its products. However, in recent years, several new beverage companies have entered the market. To retain customers, Delicious Beverages Ltd. started offering attractive credit terms, discounts, and promotional schemes. The company also increased its inventory to ensure uninterrupted supply. Identify the factor affecting the working capital requirement of Delicious Beverages Ltd. being discussed above:

  1. (A)Growth prospects
  2. (B)Level of competition
  3. (C)Production Cycle
  4. (D)Scale of operations

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

What changed in the market for the company?

Hint 2

More credit and stock means more working capital.

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. New competitors forced the company to offer credit terms and hold more inventory, which raises debtors and stock.

  2. Higher competition means more liberal credit and larger inventories, so the factor is level of competition. Option (B).

    1 mark

Answer: (B) Level of competition

Where the marks are

  • Competition raises credit and stock (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.