Bihar Board 12th Entrepreneurship Important Questions Short Answer Type Part 1 in English

Bihar Board 12th Entrepreneurship Important Questions Short Answer Type Part 1 in English

BSEB 12th Entrepreneurship Important Questions Short Answer Type Part 1 in English

Question 1. Explain the steps involved in investigation of market assessment.
Answer: The underlined steps involved in investigation of market assessment:

• The first step is to obtain a concept of the product. Then it should be ascertained whether it is already available in the market.
• Secondly it is needed to find out its application and use. If it is a new product, a detailed study is needed to find out its actual use for the consumer.
• It is necessary to find out cost per unit. It is to be examined whether this cost is comparable with that of other competitive products. This will ultimately decided the sale price.
• Every product of service has to face market competition at some stage. So it should be assessed through a study of the trends in demand and supply.
• Technical complexity should be examined and it is needed to find out whether such technology is available locally.
• Ideas should also have to be examined on the basis of expected annual turnover.

Question 2. Explain the sources for scanning environment.
Answer: The following are the sources of scaning environment:

• Daily newspapers, such has economic times, Business standard, Financial express, The times of India, The Hindus, International Herald Tribune are the most important sources of scanning environment.
• The other sources are Journals such as Business India, Business world, update, India Today fortline international etc.
• The other sources are census date, R.B.I, Bulletin, Economic Survey, Reports, of Committees Constituted by government of India. Government of India publication of economic, trade Industry and regulatory matters.

Question 3. Project identification is of great importance. Why?
Answer: Project identification has got its importance in business for the following reasons:

• Project identification initials the process of development, production employment etc.
• Project identification has consequences which are long term in nature.
• It provides the framework of the future activities of the enterprises.
• Project identification shapes the future pattern of services.
• It usually involves substantial financial outlays.
• Project identification also initiates development of basic infrastructure and environments.
• Project identification brings the necessary changes in society in course of time.

Question 4. Give the objectives of environment scanning.
Answer: The following are the main objectives of environment scanning:

• To obtain an effective utilization of resources for improved financial performance.
• To monitor constant changes in consumer behaviour, market competition, government policy etc.
• To identity the threats and opportunities of the business.
• To develop strategies towards emerging problems and safeguarding growth.
• To foresee and predict future events and adjust accordingly.

Question 5. State infrastructural facilities necessary to help an enterprise.
Answer: In absence of infrastructure an enterprise can not operate smoothly. The following are the important infrastructure which help an enterprise:

• Suitable size and location of Land.
• Adequate means of transort for incoming and outgoing.
• Appropriate plant and machinery.
• Uninterrupted supply of power.
• Proper availability of water.
• Opportunities of getting trained and skilled workers.

Question 6. Mention any two reasons to study the environment.
Answer: The following are the reasons to study environment:

• In getting success: Ensuring his survival, an entrepreneur has to succeed in attaining his objectives. It is possible only when he keeps his eye riveted on the changing scenario and adapts himself according.
• Self, adaptation: The study and scanning of environment inspires and motivates an entrepreneur to adapt himself to the changing conditions and also to real benefit by turning the situation in his favour which is very important.

Question 7. Explain any two economic factors affection the environment.
Answer: In business the economic factor extent the maximum impact. In business and industries the economic environment gets affect by some factors which are as under:

1. Stage of economic development: The shape of a business is based on the size and shape of a business enterprise, such as the Colgate company manufactured a low priced washing machine in the areas of developing and undeveloped countries where the market was undeveloped with low income.
2. Economic policies: The industrial policy, revenue policy and trade policy etc. are all includes in govt’s economic policies. The above policies sometimes have favourable or adverse or no effect.

Question 8. Is management a profession?
Answer: Management as a profession: Profession means an occupation for which specialised skills are required. These skills are not meant for self-satisfaction, success of these skills is measured not in terms of money alone.

The essential features of a profession are as follows:

• Specialised knowledge
• Acquired knowledge
• Representative body and
• Ethical standards or code of conduct.

Question 9. What are the main qualities of an entrepreneur?
Answer: The essential quality of an entrepreneur is his ability to

• take risk of future uncertainty.
• innovate something new as a profitable apportunity.
• create good or services commensurating the existing environement.
• organise for getting the desired result.
• face challenges of a highly competitive market.

Question 10. Why market assessment is necessary for entrepreneurship?
Answer: Market assessment guides the exact nature of goods or services which may be sold profitably.
Market assessment includes a study of:

• The size and type of demand, the choice and preference of consumers, the target group of customers.
• The type of competition, existence of other suppliers, the possibility of future changes in market condition.
• The estimated cost of production, margin of profit, selling price, market price of similar products and opportunities of cost effectiveness.
• The on-going innovation and changes owing to technological advancements which are likely to affect future cost and quality of output.

Question 11. What are the qualities of a successful entrepreneur?
Answer: The main qualities of a successful entrepreneur are as under:

• Talent to recognise a business opportunity market or product.
• Ability to assemble financial and non-financial resources.
• Zeal to translate ideas into action.
• Commitment and dedication to work.
• Desire to achieve even within adverse conditions.
• Competence to identify the real needs and desires of consumers and the methods to satisfy them effectively.
• Readiness to accept risks and challenges.
• Promptness to take fast and correct decision.
• Skill to foresight, forecast and future planning for growth.

Question 12. Describe the term ‘Factory cost’.
Answer: The raw material when to be converted into a finished product with the help of labour has to undergo various process. At this stage or in factory whatever the cost is incurred is known as ‘work overhead’ and when added to the prime cost, it comes to be known as factory cost.

Question 13. What is Break-Even Analysis?
Answer: Break even analysis helps in understanding ‘Returns’ and ‘Cost’ in relation to sales of a business enterprise. In case of Break-even returns through sales become equal to the cost of a products.

Question 14. Management increases efficiency. How?
Answer: Management helps in increasing efficiency through best possible planning of the activities of the organisation, through co-ordination by appointment of suitable staff and ensuring cost reductions through control.

Question 15. What is Management?
Answer: Management is a process by which for efficient end effective undertaking of work group planning, organising, appointment, directions and control are implemented.

Question 16. Define Social Responsibility.
Answer: According to Prof. Kountz and O’Donnel, “Social responsibility is the personal obligation of everyone as he acts in his own interest to assure that the righ and legitimate interests of all others are not impinged.”

Question 17. What is Market Evaluation? Why It is dove?
Answer: As certaining customers income, their likes and dislikes and details about their educational qualifications through a survey and producing products to match the above is termed as market evaluation. This is undertaken to manufacture and products in accordance with the market requirements.

Question 18. What is Market Observation?
Answer: Making an analytical study of, demand and supply of various commodity in the market and on the basis of information so gathered to make a forecast of demand for various products is termed as market observation.

Question 19. What is opportunity?
Answer: Opportunity implies reaping of benefits from the existing conditions. Some people get benefited who identity such opportunities whereas the rest achieve nothing. Opportunities are not stable, they come for a short period and then leave.

Question 20. What are the various factors of sensing an opportunity?
Answer: Following are the main factors of sensing an opportunity:

• Power of understanding
• An eye on changes taking place
• Knowledge of competition
• Information of data and its analytical study and
• Quality to adapt to change or new techniques of promotion.

Question 21. What do you understand by promotion?
Answer: Promotion refers to identification of new business opportunities and thereafter with an object to earn profit organise a business enterprise making full use of the capital, assets and management capabilities.

Question 22. How would you define a business opportunity?
Answer: Business opportunity is defined as a project or scheme which is very attractive in reference to rate of return and encourages an entrepreneur to invest in a specific project and give it a concrete shape.

Question 23. What is the importance of environment?
Answer: Importance of environment is on account of the following reasons:

• Search for a suitable opportunity,
• Fight for survival or existence,
• In the achievement of success,
• Setting oneself properly adjusted.

Question 24. What are the main limitations of environmental analysis?
Answer: Following are the main limitations of environmental analysis:

• Difficulties involved in practical application,
• Uncertain future, and
• No guarantee about the effectiveness of the enterprises.

Question 25. What is Micro Environment?
Answer: It refers to those factors which remain under the control of the entrepreneur, which include the targets of the enterprise and its functioning, type of organisation, administration and authority and policies etc.

Question 26. What is Market Environment?
Answer: Market environment refers to those external factors and forces which have a direct impact on marketing and managerial capabilities so as to develop the market with the help of desired consumers.

Question 27. What is the statistical method of demand forecasting?
Answer: Demand forecasting through statistical method is done by periodical despatches, internal arrivals and through the help of outward despatches.

Question 28. State any two features of modern concept of marketing.
Answer:

• Modern concept of marketing lays maximum stress on consumers’ satisfaction. According to this concept without customers’ satisfaction neither any profit can be earned nor the business can survive for a long period of time.
• In the modern concept of marketing goods and services are produced keeping in view the desire and requirements of the consumers or customers.

Question 29. State any four points to be considered while selecting an enterprise.
Answer: Four main points to be considered while selecting an enterprise are as under:

1. Easy to establish
2. Availability of capital
3. Stability and Continuity
4. Minimum Government control and regulations.

Question 30. What is plant layout?
Answer: A good plant layout is one which enables the raw material to pass through the different stages of manufacturing process in the shortest possible period of time. Its main objective is to increase the production capacity and make the production process least expensive.

Question 31. What is ecological feasibility?
Answer: Ecological feasibility is especially important for those products and services which have a direct or indirect impact on the environment projects such as; Generation of electricity, irrigation, cement manufacturing and chemical industry etc. The main object of such projects is to prevent environmental pollution.

Question 32. State any four factors to be considered in promotion of a business enterprise.
Answer:

1. Selection of suitable business
2. Selection of the form of business organisation
3. Financial means or resources, and
4. Size of the business enterprise.

Question 33. What points would you consider before establishing an enterprise?
Answer: There is a need to take into consideration the following points before establishing a business enterprise: Availability of labour, raw material, plant and equipments, finance management, market, location, manufacturing process and reporting on progress of the project.

Question 34. Sate any one definition of business planning.
Answer: According to Curtiloaf and others, “Business planning is also known as a form of prospectus.” In reality, business planning is a written description of what an industrialist or entrepreneur is doing and what he wants to achieve through this and what else he is thinking of doing?

Question 35. What are the conditions of good business planning?
Answer: A good business planning comprises the following essential elements. It should be simple, clear and confidential and should enable completion of the project in time bound framework.

Question 36. State any two main essentials of a good project planning or preparation.
Answer:

1. Development of a project should be based upon realistic concepts for fulfilment of certain commodity requirements or needs of the market.
2. All aspects of the project should be carefully and impartially reviewed before implementation of the project.

Question 37. What do you understand by Project Management?
Answer: Project management is achievement of desired and pre-determined objectives in a given span of time at the pre-estimated cost. Thus project from the beginning till the end is the process of planning and directing the efforts for the achievement of desired objectives.

Question 38. Give one definition of a project.
Answer: According to J. S. Citizer, “Project is the whole complex of activities involved in using resources to gain benefits.”

Question 39. What is project report?
Answer: project report is a written account of the projects initiated by an entrepreneur or firm giving details of the various activities undertaken by them. It is a written account of technical, financial, commercial and social aspects related to the project.

Question 40. State any two objectives of project report.
Answer:

1. To make an assessment of the investment opportunities and
2. To submit report for securing financial assistance.

Question 41. State any one point of difference between project formulation and project report.
Answer: Project formulation is an investigative procedure which is executed prior to making an investment decision, while the project report is prepared after making investment.

Question 42. What are resources? Why they are essential?
Answer: Resources refer to those means which are necessarily required by a person for execution of work. In absence of resources establishment of an enterprise cannot be even imagined.

Question 43. You run an enterprise. What type of resources are required?
Answer: Resources required to run an enterprise are as under: Land, Capital, Raw material, Labour, Machines and Equipments, Water, Electricity, Security and Safety and facilities of transport.

Question 44. What are the two sources of working capital?
Answer: Two sources employed for arranging working capital are:

1. Sources for arranging Long term capital
2. Sources for arranging short term capital.

Question 45. Are the human resources an active resource to run an enterprise?
Answer: Except for the human resource rest of the means and resources to run an enterprise are inactive or lifeless. Human resource is an active resource to run an enterprise.

Question 46. What is Break-Even Analysis?
Answer: Break-Even Analysis helps in understanding ‘Returns’ and ‘Cost’ in relation to sales of a business enterprise. In case of Break-even returns through sales become equal to the cost of a product.

Question 47. What is ‘Safety Margin’? What is the formula to determine safety margin?
Answer: The excess of amount over the price at Break-Even Point in actual sales is termed as safety margin. This is the difference between the actual sales price and the price at the break-even point.
Margin of Safety = Actual Sales Price – Sales Price at the B.E.P.

Question 48. State any two features of venture capital.
Answer:

1. Venture capitalist mostly makes investment in equity shares because they do not get any benefit till such times the company starts earning profit.
2. Venture capitalist apart from making financial investment in business also help by providing assistance for marketing.

Question 49. What is Capital-intensive technique?
Answer: Capital-intensive technique of production requires minimum deployment of labour and as compared to labour-intensive technique higher amount of capital investment is needed.

Question 50. State any two limitations of Capital-intensive technique.
Answer:

1. Capital-intensive technique ignores balanced regional development
2. Capital-intensive technique encourages wasteful utilisation of expensive means of production.

Question 51. What do you mean by Sales-Promotion?
Answer: Sales-promotion refers to all those activities which are undertaken to record increase in sales, such as – advertising, personal selling and propaganda and other similar kinds of activities.

Question 52. What is Preference share?
Answer: Preference shares are those shares which have a preference to get dividend according to a fixed rate and repayment of their capital at the liquidation of company before equity shareholders.

Question 53. What are the two most important objectives of Financial Management?
Answer: Two major objectives of financial management are:

1. To keep the shareholders happy and satisfied.
2. Build up capital reserves for future planning and projects of the company by earning reasonably good profit on investment.

Question 54. State any one point of difference between Shares and Debentures.
Answer: Share capital is a kind of ownership capital and as a result shareholders are paid dividend. While Debentures are issued against loan capital and as a result interest amount is paid on them.

Question 55. What are the various elements of cost?
Answer: Cost comprises of the following three main elements:

• Cost of material,
• Cost of labour and
• Expenditure.

Question 56. What is prime cost?
Answer: The production of any commodity mainly involves two types of expenditures – Raw Material and Labour. The total sum of these two constituents is known as prime cost.

Question 57. What is Franchising?
Answer: Franchising is a kind of contract arrangement. Under this a retail dealer enters into an agreement with a manufacturer that he would sell the goods and services offered by the manufacturer by charging a fixed fee or amount by way of commission.

Question 58. How do entrepreneurs differ from employees?
Answer: Difference between employees and entrepreneur are as following:
Employee:

1. Employee is that person who is appointed by entrepreneur for his help.
2. Employee never face risk of profit or loss.
3. Employee does not take decision.

Entrepreneur:

1. Entrepreneur is a person who takes risk to set-up enterprise.
2. Entrepreneur always face risk of profit or loss.
3. Entrepreneur takes decision.

Question 59. What is the purpose of sales promotion?
Answer: Sales promotion is a form by short term incentive to encourage consumers to buy our product.
The main purpose of sales promotion are as under:

• To enhance buying response by ultinate consumers.
• To increase selling efforts by dealers and sales personal.

Question 60. How does a project report differ from a preliminary report?
Answer: Difference between project report and preliminary report are as following:
Project report:

• It tells about history of product, machinery, raw materials, staffing cost etc.
• It is a permanent report.

Preliminary report:

• It tells about cost.
• It is a temporary report.

Question 61. Distinguish between fixed capital and working capital.
Answer: Distinguish between fixed capital and working capital are as following:
Fixed capital:

1. It is invested in fixed assets.
2. Used for the purpose of meeting the permanent long term needs of the business.

Working capital:

1. It is invested in current assets.
2. It is needed for meeting the short term needs of the business.

Question 62. Distinguish between entrepreneurship and management?
Answer: The following are the differences between entrepreneurship and management:

• Entrepreneurship is a spirit of an enterprise while management is an art and science of attaining the objectives of an enterprise.
• In entrepreneurship new things are created but in management, managers maintain all records and discipline.
• In entrepreneurship, entrepreneur does right things but in management, manager does right things.
• Entrepreneurship is related to production of goods but management is related to distribution of goods, and services.

Question 63. What is Demand ForeCast?
Answer: What would be the demand for a particulars product by a specific group of customers in wall defined geographical region, during a particular span of time under the planned making strategies ad the existing market environment is termed as demand forecast. In other words, how much quality of a product would be actually purchased by customers in future is demand forecast.

Question 64. What is meant by Directing?
Answer: Directing comprises of giving orders and providing directions to sub-ordinates for accomplishing work assigned to them.

Question 65. Management helps in development of society. How?
Answer: Management helps in development of society by offering products and services of the best quality by generating employment opportunities and by adopting advanced technology to safeguard the interest of people.

Question 66. How break-even point is determined?
Answer: Break even point is that point which shows no profit or no loss position.
Calculation of B.E.P. as follows:
BEP = F×S/S−V
where, F = Fixed Cost
S = Projected Sales
V = Variable Cost.

Question 67. Why is Management important?
Answer: Management is important because it is helpful in achievement of the group objectives, increases working capacity helps in development of a dynamics organisation, renders assistance in attainment of personal goals and contributes social development.

Question 68. Are all functions of management interrelated?
Answer: Yes, all the functions of management are interrelated such as planning, organising, appointing, directing and controlling and these are all interrelated.

Question 69. Is the expenditure on advertisement of wastage of money?
Answer: No, the expenditure on advertisement is not a waste of money and we do not subscribe to this view advertisements, usually benefit a large section of people.

Question 70. Give any one difference between working and selling.
Answer: Major function of working and selling is to create customers while selling is confined to sale of products and services.

Question 71. Enumerate any two key functions of an entrepreneur.
Answer: The two key functions of an entrepreneur are:

1. Mobilizing various resources
2. Making business plans and policies.

Question 72. How can fantasizing help an entrepreneur to spot new ideas?
Answer: Business opportunities are created when entrepreneur fantasizes about Products and services. Many investors think the new spot of ideas about their investment. Fantasizing helps it in creating.

Question 73. What are the contents of financial profile of the feasibility report.
Answer: The financial profile of the feasibility report must include cost of production, estimation of revenue, profits and losses, stock of raw materials, stock & semi-finished and finished products and loans to be obtained.

Question 74. What is the relationship between opportunity and entrepreneur?
Answer: The relationship between opportunity and entrepreneur is similar to the water fish relationship. Fish has no chance of survival in absence of water that looks for its food in water and lives in it. To an enterprising fish water is its opportunity and a life death relationship exists between them.

Similarly an entrepreneur’s primary job is to contemplate over the opportunities when identified. After obtaining various relevant information he evaluates the reality and then he determines and ensures to establish a new enterprise after due consideration in term of managing resources for it.

Question 75. Give any three objectives of environment scanning.
Answer: Environmental scanning is conducted to find out the influence of different factors and persons on the business transactions. Through environment scanning, organisations monitor various factors in environment to identify opportunities and threats of the environment. Following are the main reasons: which scanning of environment is considered essential: (i) Effective use resources, (ii) Helpful in strategy formulation, (iii) Identification of threats and opportunities.

Question 76. What is feasibility study?
Answer: The feasibility studies of the industrial projects are pre-invest enquiries made for the purpose of providing information for invest! decisions. The basis objective of the feasibility is to give strong answer to various questions by comparing the alternatives with each other by collect relevant data of different alternatives. The industries established without man feasibility study have greater chance of failure. The main information required for various projects is almost similar.

Question 77. Explain any two steps in the execution of setting up an enterprise.
Answer: Two steps in the execution of setting up an enterprise:
(i) Arranging the site: Prior to selling up of an enterprise, all the facilities which necessitate the project should be carefully considered in terms of water, electricity and geographical approaches etc.

(ii) Construction of building: Sometimes, the site or building is provided in the industrial area on rent by the government, otherwise, according to the suitability of the project, either the land or the building can also be obtained on rent from some private agency.

Even if this is not possible the private land can be purchased in which a building can be raised according to the suitability of production, technical infrastructure and other considerations. The building should be erected by keeping in view the future expansion and development.

Question 78. Why time boundation is essential in planning?
Answer: The factor of period in the planning process has a significant place. Which target is to be achieved when, is predetermined. In this context, the planning is of three kinds:

• Short term plans: when a plan is formed on one year basis or less, it is termed as short term plan.
• Middle term plans: when a plan period is bracketed for one to five years for completion it can be termed as middle term plan.
• Long term plans: The plan for which the completion is intended for more than five years is known as long term plan.

Question 79. What are the objectives of project appraisal?
Answer: Project appraisal: when any idea strikes the mind which appears to be useful for the project has to pass through various stages of tests and strict evaluation in terms of its impact on the economic, financial and technical aspects which are deemed to be in conformity with the project and the investment capital is earmarked for it by ensuring a good return from it, and that would only be possible when a best alternative is picked up.

Therefore, the project appraisal here refers to the identification of the economic and financial status of a project, administrative or managerial acumen, technical and communicative infrastructure in terms of their analysis and appraisal on the basis of which an entrepreneur finally arrives at a decision of starting the business after he feels confident and optimistic with regard to the success and it also involves the act of visualising the project viability, credibility and profitability.

Question 80. What factors affect the physical resources?
Answer: The following elements have their maximum impact on physical resources:

• Location of land, the size and its cost.
• The transport facility to access the land, ambience of location, machines, instrument and equipments, their availability, their quality, cost, technique and time span for supply are important for consideration.
• The conditions for installing machinery, and its repairs etc.
• Short and long term costs and replacement facility.
• The need of trained and experienced workforce for operating the machines.