Raj runs a small tea stall with two helpers. A seller offers him an expensive computerised control system.
(A) Raj should check that the costs of installing and operating the system do not exceed the benefits from it.
(B) Raj’s stall may not be able to justify the expenses involved in such a system.
(C) If Raj’s helpers object to the system, it shows the limitation ‘costly affair’.
(D) If a new tax rule raises Raj’s costs, it shows the limitation ‘difficulty in setting quantitative standards’.
Which of the statements given above are correct?
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A) and (B) only
(A) Raj should check that the costs of installing and operating the system do not exceed the benefits from it. — Correct. Control is a costly affair. Its costs of installing and operating should not exceed the benefits it brings.
(B) Raj’s stall may not be able to justify the expenses involved in such a system. — Correct. A small enterprise cannot afford an expensive control system. It cannot justify the expenses involved.
(C) If Raj’s helpers object to the system, it shows the limitation ‘costly affair’. — Incorrect. Employees objecting to control shows the limitation resistance from employees. They see control as a restriction on their freedom.
(D) If a new tax rule raises Raj’s costs, it shows the limitation ‘difficulty in setting quantitative standards’. — Incorrect. A tax rule comes from government policy. It shows little control on external factors, because a firm cannot control government policies.
NCERT (2026-27 Edition): “(ii) Little control on external factors: Generally an enterprise cannot control external factors such as government policies, technological changes, competition etc.” “(iii) Resistance from employees: Control is often resisted by employees. They see it as a restriction on their freedom. …” “(iv) Costly affair: Control is a costly affair as it involves a lot of expenditure, time and effort. A small enterprise cannot afford to install an expensive control system. It cannot justify the expenses involved. Managers must ensure that the costs of installing and operating a control system should not exceed the benefits derived from it. …” |