Q No. Content Marks
Q-1) Kartik wants to start a new Readymade Garments shop in his colony. He is aware that this is a lucrative venture for him. Do you think that Kartik has chosen the right opportunity?


Kartik should look nto the various factors before deciding on the opportunity. even if the opportunity looks promising, he must look into the environmental factors (PESTEL) before choosing the best opportunity.

Q-2) What is the meaning of shipping in the process of operational plan?


Shipping is the process that describe the flow of goods/services from production to the final consumer.

Q-3) What is of paramount importance for success of any organization?


Human Resource

Q-4) Why is it said that “A venture capitalists investments are illiquid.” Give reason.

Ans. Meaning of illiquid

Reasons- economic instability or issues relating to the asset

Q-5) Ram Prasad, a cotton grower from Bihar, wants to start a cottage industry for weaving cotton into handloom. Which specialized financial institution should he approach to meet the credit requirements of his industry?



Q-6) What points should an entrepreneur take into account while selecting the form of ownership? State any four.






Tax concern


Q-7) How is excise duty different from Sales Tax?


Excise is a tax on the act of sales while the sales tax is a tax on the act of manufacture or production of goods.

Q-8) “Big brand make towards franchising.” Why?


  1. it considers franchising as an easy mode
  2. chances of success are higher due to commitment level of the franchisor and the franchisee.
  3. it is a powerful and ideal way to expand business.
  4. it is best suited for a company which does not have any capital, manpower or time to build network of company owned outlets.
Q-9) A firm is follows a single window purchase system in his firm. The supplier is a relative of the owner. Comment on this decision of the entrepreneur.


1.    disinterest or non-availability of other suppliers during the time of crisis.

2.    favouritism of any time in business only leads to short-term benefits and has long term loss of goodwill and reputation in the market.

Q-10) “An enterprise that does not grow eventually dies.” Explain this statement with a suitable example.


Market is dynamic

Innovation is essential

Q-11) How is follow-up helpful to any entrepreneur?


Developing ways

Evolving ideas

Removing obstacles

Q-12) “An entrepreneur who fails to scan business environment is unlikely to survive in the long run.” Explain this statement.


1.      Helps in making the choice of business.

2.      Effective utilisation of resources.

3.      Finding out threats and opportunities.

4.      Helps in planning and policy-making.

5.      Helps to convert ideas into successful projects.


Q-13) An entrepreneur during the industry analysis of his competitions in the line of business, realizes that the competitors are better in their business plans and their execution. Should the entrepreneur add unique selling point in the existing plan to get a creative niche above others or should he go for a completely different line of business where the competition is less and he is easily able to find his feet in the market? Give reasons for your answer.


1.    this will indicate that the entrepreneur is creative and so want to solve the problem with creativity.

2.    the entrepreneur has the ability to concentrate on the problem and have a suitable solution.

3.    here the entrepreneur will be a problem solver and is not afraid of competition.

4.    it also reflects that the entrepreneur has got the quality of endurance which is an essential trait for a successful entrepreneur.

Q-14) ‘Unique Motors Ltd.’ was a car dealer. It took over a car manufacturing plant ‘Speedcart & Co.’ and started a new business in the name of ‘Uniquecart Ltd.’ to synergise and capture a major share of the market. Like their competitors, they decided to sell their cars through company appointed dealers (retailers) in various parts of the country. This would relieve the company from the burden of selling the cars while at the same time giving them control over the distribution process.

(a) Name and explain the ‘Enterprise Growth Strategy’.

(b) Identify the channel of distribution used by ‘Uniquecart Ltd.


a. Merger- it is a combination of two companies into one larger company. The acquiring company takes over the assets and liabilities of the merged company. All the combining companies are dissolved and only the new entity continues to operate.

b. Indirect – One level- it involves one middleman called ‘retailer’.


Q-15) Harish works as the chief accountant in ABC infrastructure Ltd. He came to know that the Company is planning to announce an interim dividend. He purchased 2000 shares of the Company at the market price of Rs. 215/- with an expectation of an appreciation in the market price to Rs. 577/- . He sold his holdings and made a handsome profit. Name the related concept and which social values associated here.


Meaning of interim dividend, Role of chief accountant, his conduct for his benefit and affected social values.

Values- trust, honesty, loyalty and truthfulness.

     (3)                                                                                                                         (4)
Q-16) Mr. Raghav retired as CEO of a well reputed IT company after having worked for 40 years in USA. He returned to India with a desire to encourage entrepreneurial ventures in IT sector. He was approached by Nitin, a budding entrepreneur in IT sector whose venture was in a start-up stage and was falling short of funds. Apart from investing funds, Mr. Raghav also provided proactive advice, guidance and industry connection and thus, simultaneously helping them in raising high returns on investment.

Identify and explain the source of raising finance used by Nitin.


Angel Investor; Business angel or angel investor, is an affluent individual who provides capital for a business start-up and early stage companies having a high-risk, high-return matrix usually in exchange for a convertible debt or ownership equity.

Q-17) ‘Public issue is the most popular method of raising capital by an entrepreneur’. Explain the method and any two advantages of it.


This method involves raising of funds directly from the public through issue of prospectus.

Advantages: a. access to capital; b. Mergers and acquisitions; c. higher valuations; d. benchmark trading price; e. capital formation; f. incentives; g. reduced business requirements; h. less dilution; i. liquidity; j. prestige. (Any two)

Q-18) “It is common for start-ups to have three or four formats to follow for the same business plan.” What are those? Describe.


Elevator pitch

A pitch deck with oral narrative

A written presentation for external stakeholders

An internal operational plan


Q-19) Will you, as an entrepreneur use the base price method for consumable items? Justify your answer.



  1. raising the sales
  2. easy promotion
  3. customers will not be lost
  4. scope for bargain
Q-20) Naresh had an ice cream factory and sold ice cream locally. He had been doing good business for the last ten years. But with the entry of competitors, his business declined and he now has to close his business. Since he is an enterprising person, he decided to take up exclusive distribution of a popular international brand of ice-creams called ‘Icecone’. In return, he has to pay royalties to ‘Icecone’ and conform to their standardised operating procedures. Instead of the plastic cups which cause environmental hazards, ‘Icecone’ had biscuit cups and cones. To boost immediate sales, he has decided to offer the scheme of ‘Buy two cups/cones for the price of one’ for the first ten days.

(a) Identify and state the concepts of ‘Enterprise Marketing and Growth Strategies’ discussed in the above para.

(b) Identify any one value which the business wants to communicate to the society.


a. Franchising- It is an arrangement whereby the manufacturer or sole distributor of a trademarked product or service gives exclusive rights of local distribution to independent retailers in return for their payment of royalties and conformance to standard operating procedures.

b. Environmental protection

Q-21)  Deepika is running a beauty parlor and had varying number of customers during 5 weeks. This information and the average weekly billing amount are in the following table:

Week Number of Customers Average amount billed
1 20 115
2 20 110
3 60 165
4 21 210
5 23 100
6 20 160

If the cost of goods sold or variable cost is 60% of sale price.

Calculate: Total bill amount, Unit of sales, Unit Cost, Gross Margin


Total bill amount=15400

Unit of sales= customers

Unit price= total bill amount/no. of customers=15400/110=140

Unit cost=140 x 60/100=84(cost of goods sold or variable cost is 60% of the sale price

Gross margin= per unit of sale= unit price-unit cost=140-84=56

Week Number of Customers Average amount billed Total amount
1 20 115 2300
2 20 110 2200
3 60 165 990
4 21 210 4410
5 23 100 2300
6 20 160 3200



Q-22) Mr. X had always wanted to manufacture an innovative, energy efficient fan. He was looking into various options and has finally narrowed it down to one option. He understands that the entire idea would have to follow a process. Identify and explain the process.


1.    product identification.

2.    application and use

3.    level of operation

4.    cost

5.    competition

6.    technical complexity

7.    annual turnover and profit amrgin

Q-23) Pureminds Ltd is a company into manufacturing of water purifiers, water dispensers, packaged drinking water and hand sanitizers. They invest in research and development and would update their products on a regular basis. They also encourage feedback and suggestions from the customers.

Acting on one such suggestion, they decided to manufacture a water bottle with a built in water purifier called ‘Wonderpure’. They spent a lot of money on promoting the product with the tagline ‘Your child is secure with Wonderpure’. The target segment was- quality conscious consumers. It was priced in such a way that the cost of investment of the original research gets recovered from the customer. The product was an instant hit. 6

(a) Identify and explain the pricing strategy to be used by Pureminds Ltd.

(b) State two advantages and two disadvantages of the pricing strategy identified in part.


a. Price Skimming- in this pricing technique the company charges a higher price for their products so that the initial cost spent on research and development can be recovered.

b. advantages- helps in recovering research and development costs; catering to quality conscious customers

Disadvantages- the product will not sell if competitors introduce similar products at a lesser price; it is not a viable option if there are strict legal and government regulations; if the company has a history of introducing products on the skimming method, customers will not be interested to buy as they are aware that the price would eventually come down. (Any two).


The United company manufactures three products – Lipsticks, Eyeliners, Nailpaints. The variable expenses and sales prices of all these products are given below:




Eyeliners Nailpaints
Sales price per unit


200 100 50
Variable cost per unit


100 75 25


The total fixed expenses of the company are Rs. 50,000 per month. For the coming month, it expects the sale of three products in the following ratio:



Product Z: 70%


Contribution Margin per unit for each product:

Product                           Lipsticks                  Eyeliners               Nailpaints

Sale price @ unit             `200                 `100                  `50

Variable cost @ unit           `100                       `75                 `25

Contribution                         `100                              `25                       `25

Thus Contribution Margin per unit is calculated.

Now to calculate Weighted average Contribution Margin(CM) per unit

Lipstick CM × sales mix percentage + Eyeliners CM × sales mix percentage + Nailpaints CM × sales mix percentage


100 × 20% + 25 × 50% + 25 ×70% = 20+12.5+17.5= `50.

Thus Weighted average CM per unit is ` 50.

Break-even point in Units of sales mix = Total Fixed cost/Weighted average CM per unit

= `50,000 = `1000

` 50

Product Break-even in units

a) Lipsticks- 1000×20 = 200 units


b) Eyeliner- 1000×50 = 500 units


c) Nail Polish- 1000×70 = 700 units


Product break-even in Rupees

Product units at break-even point × price per unit


a. Lipstick = 200 units × `200 = `40,000


b. Eyeliner = 500 units × `100 = `50,000


Nail polish= 700 units × ` 50= `35,000


About booksbysonamsachdeva

Hello Readers! I am Sonam Sachdeva and I am an Author, Lecturer, and yes, now a Blogger. I have a rich experience of 4 years in teaching core Management subjects to more than 1000 students. I have done MBA and BBA from Guru Gobind Singh Indraprastha University, PGDIBO from IGNOU and ACM (HRM) from AIMA. I have also qualified UGC NET & JRF. I am presently empanelled as an Assistant Professor at Delhi University, New Delhi. I have attended various National and International Conferences, Seminars and Workshops. I have written several research papers, case studies and book reviews which have been published in reputed International and National journals. I was a rank holder in my post-graduation and graduation and was a scholar at school. Moreover, I have been an active recruiter in the institutions I served. I am a member of All India Management Association and Delhi Management Association. Teaching is my passion and I hope that through this blog, I will help you become expert in some of the most demanding subjects in Management. I hope that you will like the stuff. For any queries, write at: Enjoy reading... Sonam Sachdeva

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