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Explain the… (Class 12 Business Studies SQP 2026-27, Q23B)

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Business StudiesCBSE Class 12 · Sample paper, session 2026-27 · 3 marks · Short answer

CBSE Class 12 Business Studies sample paper 2026-27: question 23(B)

From the official CBSE sample question paper for 2026-27, section A, question 23(B), for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q23(B) · 3 marks · Short answerFinancial Management

Explain the following factors affecting the fixed capital requirements of a company:
(a) Choice of technique
(b) Growth prospects

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

Machines vs workers: which needs more fixed assets?

Hint 2

Growth usually means more capacity.

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. (a) Choice of technique: A capital-intensive organisation relies on plant and machinery and needs more fixed capital; a labour-intensive one needs less.

    1½ marks

  2. (b) Growth prospects: Higher expected growth needs more fixed assets; firms may even build capacity in advance to meet anticipated demand, raising fixed capital needs.

    1½ marks

Answer: Capital-intensive techniques and higher growth prospects both raise the fixed capital requirement.

Where the marks are

  • Each factor: ½ heading + 1 explanation

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.