Business Studies 3 Marks Question

Mr. Ankit is a Sole Trader. He runs the 'Prabhat Medical Store'. He needs some money. For this, he met the Branch Manager of a bank. Ankit told the Manager that he needed some such loan as may have the maximum limit fixed. He should be permitted to withdraw as much money as desired up to that limit from the bank. Also, he wants that the interest charged should not be on the maximum limit fixed but on the actual amount withdrawn. The Bank Manager said that they had got such a scheme under which loan could be granted only when the person availing loan kept some property with the bank by way of security. Mr. Ankit became prepared to fulfil this condition. In this way, the loan agreement was finalised between Mr. Ankit and the bank.
Identify this scheme of the bank and explain it.

Mayank has a surplus money of Rs. 25,00,000, which he wants to invest either in equity shares or in preference shares. Two real estate companies (Magic Estate and Skylark Enterprises), with almost the same creditworthiness, are launching their public issue. Magic Estate is coming up with a public issue of preference shares, while Skylark Enterprises is coming up with equity shares. Mayank is confused about the two issues. He consulted his friend Gaurav, who is a portfolio manager and Gaurav convinced him to invest the money in Magic Estate due to 'Preferential Rights of preference shareholders over equity shareholders.
State the 'Preferential Rights' stated by Gaurav, which convinced Mayank to invest in Magic Estate.

When we buy some goods from the market the shopkeeper issues us a Trade Document. At the bottom of this document is written E. & Ο.E. What do you understand from these letters? Explain the justification of these letters.

Pramesh was a successful businessman and owned a departmental store. He was aware of the fact that profit is the reward of risk-bearing. So, in order to earn more profits, he opened two more departmental stores and employed a team of young staff to look after the stores. Initially, the staff was very sincere and Pramesh earned huge profits from his 3 departmental stores. However, over the last two years, his business is running into losses. On close analysis, he found that his staff was not giving much attention to the customers. Moreover, there were many cases of embezzlement (misappropriation of funds) by the employees.
Identify and explain the main cause behind the losses in Pramesh's Business.

To which Auxiliary to Trade has related the following statement?
i. There is a lot of risk in Business.
ii. Information in business has a special significance.
iii. Business can't be run without funds.
iv. To do business material has to be purchased from far off places.

Ramakant is a successful businessman who is engaged in manufacturing of auto spare parts. The products manufactured by him are sold not only in India, but are also exported to various countries like Singapore, Switzerland, Belgium, etc. On the basis of given case, answer the following questions:
a. Identify the two kinds of business in which Ramakant is engaged.
b. Differentiate between the two types of business as identified in part (a) of the question