AHSEC Class 12 Entrepreneurship Development
Solved Question Paper 2022
(Theory)
Full Marks: 70
Pass Marks: 21
Time: Three hours
The figures in the margin indicate full marks for the questions.
1. (a) Write the full form of GST. 1
Ans:- GST stands for Goods and Services Tax.
(b) New Economic Policy was introduced in the year 1991.
(Fill in the blank) 1
Ans:- 1991.
(c) MSMED Act was introduced in the year 2006.
(True/ False) 1
Ans:- True. The MSMED Act (Micro, Small and Medium Enterprises Development Act) was introduced in the year 2006.
(d) All business needs certain basic resources. Name those resources. 1
Ans:- The basic resources needed by all businesses are capital, labor, land, and entrepreneurship.
(e) Mention two sources of Long-term finance. 1
Ans:- Two sources of long-term finance are equity shares and debentures.
(f) Two types of costs are fixed costs and variable costs.
(Fill in the blanks) 1
Ans:- Fixed costs, variable costs.
(g) Give any two ‘Sales Promotion’ techniques which can be used by a business to attract new customers. 1
Ans:- Two 'Sales Promotion' techniques that can be used by a business to attract new customers are:
a). Discounts and Coupons: Offering discounts on products or providing coupons that customers can redeem for discounts on their purchases.
b). Free Samples: Giving away free product samples to potential customers to encourage them to try the product and hopefully make a purchase.
(h) Name one scheme introduced by the government to promote Entrepreneurship in India. 1
Ans:- One scheme introduced by the government to promote entrepreneurship in India is the "Startup India" initiative.
2. (a) Define a ‘Micro Enterprise’. 2
Ans:- A 'Micro Enterprise' is a small-scale business or organization characterized by its limited size in terms of workforce, investment, and turnover. In most cases, micro enterprises employ fewer than 10 people and have relatively low capital investment.
(b) Name two factors considered by an entrepreneur to determine the viability of a project. 2
Ans:- Two factors considered by an entrepreneur to determine the viability of a project are market demand (whether there is a sufficient demand for the product or service) and financial feasibility (whether the project is financially sustainable and can generate profits).
(c) What is a DPR? 2
Ans:- DPR stands for Detailed Project Report. It is a comprehensive document that outlines all the details and aspects of a project, including its technical, financial, and operational aspects. A DPR is typically used for project planning, evaluation, and obtaining financial assistance.
(d) Name two institutions that provides financial aid to a business project. 2
Ans:- Two institutions that provide financial aid to a business project are banks and government agencies. Banks offer loans and credit facilities, while government agencies may provide grants, subsidies, or other financial incentives to support business projects.
(e) What kind of items are included in the working capital? 2
Ans:Working capital includes items such as cash, inventory, accounts receivable, and short-term investments that are used in the day-to-day operations of a business. It represents the funds available for covering daily expenses and maintaining the operational cycle of a business.
(f) Mention two components of site selection in case of an Enterprise. 2
Ans:-Two components of site selection in the case of an enterprise are location and infrastructure. Location refers to the geographic area where the enterprise will be established, and infrastructure includes factors such as transportation facilities, utilities, and accessibility.
(g) Define ‘Trade Credit’. 2
Ans:- Trade Credit' is a form of short-term financing in which a business can purchase goods or services on credit from its suppliers or vendors. It allows the business to receive goods and pay for them at a later date, usually within a specified credit period.
(h) Mention two distinctive features of ‘Venture Capital’.
Ans:- Two distinctive features of 'Venture Capital' are:
i). Equity Investment: Venture capital involves providing funding to startups or early-stage companies in exchange for equity ownership. Venture capitalists take on a share of ownership in the business and share in its potential profits or losses.
ii). High-Risk, High-Reward: Venture capital investments are typically high-risk because they are made in innovative and unproven ventures. However, they also offer the potential for high returns if the invested companies succeed.
(i) What do you understand by ‘Environmental Scanning’? 2
Ans:- Environmental Scanning' refers to the process of monitoring and analyzing the external environment of a business to identify and understand potential opportunities and threats. It involves keeping a close watch on factors such as market trends, competition, regulatory changes, and technological developments.
(j) Mention two methods of Pricing. 2
Ans:- Two methods of pricing are:
i) Cost-Plus Pricing: This method involves determining the cost of producing a product or delivering a service and then adding a markup or profit margin to establish the selling price.
ii) Competitive Pricing: With this approach, a business sets its prices based on what competitors are charging for similar products or services in the market. The aim is to stay competitive and attract customers based on price.
3. (a) What is a Project Report? Explain. 3
Ans:- Project Report: A project report is a comprehensive document that provides detailed information about a specific project, usually undertaken by a business or organization. It serves as a blueprint for planning, executing, and evaluating the project. A project report typically includes the following elements:
Project Description: A detailed description of the project, including its objectives, scope, and purpose.
Technical Details: Information on the technology, equipment, and resources required for the project.
Financial Projections: Projections of the project's financial aspects, including cost estimates, revenue forecasts, and funding requirements.
Market Analysis: An analysis of the market or industry in which the project operates, including market size, trends, and competition.
Risk Assessment: Identification and evaluation of potential risks and mitigation strategies.
Implementation Plan: A step-by-step plan outlining how the project will be executed, including timelines and milestones.
Feasibility Study: An assessment of the project's feasibility, considering technical, financial, and operational aspects.
Legal and Regulatory Compliance: Information on the legal and regulatory requirements associated with the project.
Environmental Impact: Assessment of the project's impact on the environment and measures to mitigate negative effects.
(b) What are the steps involved in Registration of an enterprise under MSME? 3
Ans:- Steps involved in Registration of an enterprise under MSME:
Identification: Determine whether your enterprise qualifies as a Micro, Small, or Medium Enterprise based on criteria such as investment in plant and machinery or equipment, and annual turnover.
Document Preparation: Prepare the necessary documents, including the application form, along with supporting documents such as Aadhar card, business PAN, and bank details.
Online Registration: Visit the official MSME registration portal and complete the online registration process by providing the required information and uploading the necessary documents.
Submission: Submit the application online. There is usually no registration fee for MSME registration.
Acknowledgment: After submission, you will receive an acknowledgment or a Udyam Registration Certificate.
(c) Mention three factors influencing Cost of Production. 3
Ans:- Factors influencing Cost of Production:
Input Costs: The prices of raw materials, labor, and other inputs required for production can significantly impact the cost of production. Fluctuations in input costs can affect profitability.
Technology and Efficiency: The level of technology and production efficiency adopted by a business can influence production costs. More efficient processes often lead to lower costs.
Economies of Scale: The scale of production can impact costs. Larger production volumes often lead to lower per-unit costs due to economies of scale.
(d) Mention three objectives of Human Resource Management. 3
Ans:-
(e) Mention three salient features of the New Economic Policy of 1991.
Ans:- Salient features of the New Economic Policy of 1991:
1.Liberalization: The policy marked a shift from a highly regulated and controlled economy to a more liberalized and market-oriented one. Trade barriers were reduced, and foreign investment was encouraged.
2. Privatization: The government initiated the privatization of public sector enterprises to reduce the role of the state in the economy and promote private sector participation.
3.Globalization: The policy promoted greater integration with the global economy through trade and investment liberalization, allowing Indian businesses to compete on a global scale.
4.Industrial Reforms: Industrial licensing was significantly reduced, and industries were given more autonomy and flexibility in their operations.
5. Financial Sector Reforms: The banking and financial sectors underwent substantial reforms to modernize and liberalize the financial system, including the introduction of new banking and capital market regulations.
(f) Distinguish between Micro and Medium Enterprise. 3
Ans:- Distinguish between Micro and Medium Enterprise:
Size: The primary distinction between a Micro Enterprise and a Medium Enterprise lies in their size. A Micro Enterprise is the smallest, with a very limited number of employees and minimal investment in plant and machinery or equipment. A Medium Enterprise, on the other hand, is larger in terms of both workforce and investment.
Criteria: In many countries, including India, the specific criteria for categorizing an enterprise as Micro, Small, or Medium may vary, but it typically involves factors like the number of employees and the amount of investment in assets.
Scope: Micro Enterprises usually have a narrower scope of operations compared to Medium Enterprises, which can handle more extensive and complex business activities.
(g) Why Pricing is important? 3
Ans:- Pricing is crucial for several reasons:
Revenue Generation: Pricing directly affects a company's revenue. The right pricing strategy can maximize revenue, while poor pricing decisions can lead to financial losses.
Competitive Advantage: Effective pricing can give a company a competitive edge in the market. Competitive pricing can attract customers, while premium pricing can signal quality and exclusivity.
Profitability: Pricing plays a significant role in determining profitability. It must cover production costs and provide a profit margin to sustain and grow the business.
Market Positioning: Pricing can be used to position a product or service in the market. High prices may position a product as premium, while lower prices can position it as budget-friendly.
Demand Management: Pricing can influence demand for a product or service. Adjusting prices can help manage demand fluctuations and optimize inventory.
(h) What are the various ways of promoting a product in a market? 3
Ans:- There are several methods to promote a product in the market, including:
Advertising: Using various media channels like television, radio, print, online, and social media to create awareness and interest in the product.
Sales Promotion: Offering short-term incentives such as discounts, coupons, contests, or free samples to encourage immediate sales.
Public Relations: Building and maintaining a positive image for the product and company through media coverage, press releases, and community involvement.
Content Marketing: Creating valuable and informative content (e.g., blogs, videos, infographics) to engage and educate potential customers.
Social Media Marketing: Leveraging platforms like Facebook, Instagram, and Twitter to reach and interact with a wider audience.
Influencer Marketing: Collaborating with influencers in the industry or niche to promote the product to their followers.
Trade Shows and Events: Participating in industry-related events and exhibitions to showcase the product to a targeted audience.
(i) Mention three problems faced by the entrepreneurs in India. 3
Ans:- Problems faced by entrepreneurs in India:
Access to Finance: Entrepreneurs often face challenges in securing adequate funding for their business ventures, particularly in the early stages. Limited access to capital can hinder growth and innovation.
Regulatory and Compliance Burden: The complex regulatory environment in India can be a major hurdle for entrepreneurs. Navigating through various permits, licenses, and compliance requirements can be time-consuming and costly.
Infrastructure and Logistics: Issues related to inadequate infrastructure, transportation, and logistics can impact supply chains and increase operational costs.
Market Competition: Intense competition in various sectors can make it challenging for new entrepreneurs to establish a foothold in the market.
Talent Acquisition: Finding and retaining skilled and experienced talent can be difficult, especially in specialized industries.
Lack of Mentorship: Many entrepreneurs lack access to experienced mentors and networks that can provide guidance and support for their business endeavors.
Market Volatility: Economic and market fluctuations can pose risks to businesses, particularly startups that may have limited resources to weather downturns.
4. (a) Discuss the functions of IDBI towards Encouragement of Entrepreneurship in India. 5
Ans:- The Industrial Development Bank of India (IDBI) has played a significant role in encouraging entrepreneurship in India through various functions:
Financial Assistance: IDBI provides financial assistance to entrepreneurs and businesses in the form of loans, credit facilities, and financial support for the establishment, expansion, and modernization of industrial projects. This financial aid can be crucial for entrepreneurs to fund their ventures.
Project Promotion: IDBI identifies and promotes viable business projects by conducting feasibility studies and assisting entrepreneurs in project planning. It helps in assessing the feasibility of new ventures and provides valuable insights to potential entrepreneurs.
Refinancing: IDBI refinances loans extended by other financial institutions, which helps in reducing the cost of borrowing for entrepreneurs. This encourages banks and other financial institutions to provide more loans to entrepreneurs.
Technical Assistance: The bank offers technical assistance and consultancy services to entrepreneurs to enhance their project management and operational capabilities. This support can improve the chances of project success.
Equity Participation: IDBI participates in the equity capital of various industrial enterprises, including startups and small businesses, by acquiring shares. This infusion of equity capital can boost the financial health of these enterprises.
Entrepreneurial Development Programs: IDBI conducts training programs and workshops to develop the entrepreneurial skills and managerial abilities of individuals interested in starting or expanding their businesses. This helps in building a skilled pool of entrepreneurs.
Export Promotion: IDBI supports export-oriented ventures by providing financial assistance and guidance. This encourages entrepreneurship in the export sector and contributes to foreign exchange earnings.
Infrastructure Development: The bank invests in infrastructure projects, which indirectly supports entrepreneurship by improving transportation, logistics, and communication networks, facilitating business operations.
(b) Why is it important for an enterprise to have an effective Marketing Strategy? 5
Ans:- Having an effective marketing strategy is crucial for several reasons:
Market Awareness: A well-defined marketing strategy helps a business understand its target market, customer needs, and market trends. This awareness is essential for designing products or services that meet customer demands.
Competitive Advantage: A robust marketing strategy allows a business to differentiate itself from competitors. It helps in highlighting unique selling points and creating a competitive edge.
Customer Acquisition: Marketing strategies attract and acquire new customers. Effective marketing campaigns generate leads and convert them into paying customers, which is vital for business growth.
Brand Building: Consistent marketing efforts build brand recognition and trust among customers. A strong brand can command higher prices and customer loyalty.
Revenue Generation: Marketing is directly linked to revenue generation. A well-executed strategy can lead to increased sales and revenue, contributing to the financial health of the enterprise.
Market Expansion: Marketing strategies can help a business expand into new markets or reach a wider audience, both domestically and internationally.
Product Development: Customer feedback gathered through marketing channels can inform product or service improvements and innovations.
Risk Mitigation: A diversified marketing strategy can help mitigate risks associated with market fluctuations or changes in customer behavior.
Long-Term Success: An effective marketing strategy is not only about short-term gains but also about building a sustainable and successful business over the long term.
(c) Discuss the salient features of ‘Make in India’. 5
Ans:- Make in India' is an initiative launched by the Government of India to promote manufacturing and boost economic growth. Some of its salient features include:
Ease of Doing Business: 'Make in India' aims to simplify business regulations, streamline procedures, and reduce bureaucratic hurdles to make it easier for both domestic and foreign companies to start and operate businesses in India.
Attracting Foreign Direct Investment (FDI): The initiative seeks to attract foreign investments by offering a more investor-friendly environment, with relaxed FDI norms in various sectors, such as defense, railways, and retail.
Focus on Key Sectors: 'Make in India' identifies and promotes key sectors like manufacturing, electronics, defense, aerospace, and infrastructure, where India has a competitive advantage or growth potential.
Infrastructure Development: To support manufacturing, there is a strong emphasis on infrastructure development, including the creation of industrial corridors, logistics hubs, and improved transportation networks.
Skill Development: The initiative places importance on skill development and vocational training to enhance the employability of the workforce, aligning it with the needs of the manufacturing sector.
Intellectual Property Protection: 'Make in India' aims to strengthen intellectual property rights protection to encourage innovation and technology transfer.
Promotion of 'Green' Manufacturing: Encouraging sustainable and environmentally friendly manufacturing practices is a key component of the initiative.
Global Outreach: 'Make in India' promotes India as a global manufacturing hub through international campaigns and trade events.
Job Creation: A primary objective is to create millions of jobs, both in manufacturing and related sectors, to address India's employment challenges.
Digital India Integration: The initiative leverages digital technologies and e-governance to facilitate business processes, registrations, and approvals
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