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 Bihar Board 12th Entrepreneurship Important Questions Short Answer Type Part 2

Bihar Board 12th Entrepreneurship Important Questions Short Answer Type Part 2

Question 1.
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 2.
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 3.
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 4.
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 5.
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 6.
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 7.
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 8.
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 9.
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 10.
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 11.
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 12.
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 13.
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 14.
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 15.
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 16.
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 17.
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 18.
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 19.
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 20.
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 21.
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 22.
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 23.
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 24.
What is meant by Directing?
Answer:
Directing comprises of giving orders and providing directions to sub-ordinates for accomplishing work assigned to them.

Question 25.
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 26.
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×SS−V
where, F = Fixed Cost
S = Projected Sales
V = Variable Cost.

Question 27.
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 28.
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 29.
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 30.
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 31.
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 32.
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 33.
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 34.
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 35.
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 36.
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 37.
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 38.
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 39.
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 40.
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.
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