BSEB Bihar Board 12th Entrepreneurship Important Questions Short Answer Type Part 3 are the best resource for students which helps in revision.

Bihar Board 12th Entrepreneurship Important Questions Short Answer Type Part 3

Question 1.
What is profit volume ratio?
Answer:
The profit volume ratio, which is also called the contribution ratio expresses the relation of contribution to sales.
P/V ratio = \(\frac{\text { Contribution }}{\text { Sales }} \times 100\)

Question 2.
Explain Operational plan as a feature of feasibility plan.
Answer:
Operational plan is the soul of the feasibility report. It shows the methods of production, the quality concerns, optimization of resources, cost effectiveness, the leadership and managerial prudence of the entrepreneur etc. The entrepreneur should provide the flow chart of the operational plan providing vital statistics of various elements involved in the operation of the enterprise.

Question 3.
Explain financial profile as a feature of feasibility plan.
Answer:
Financial profile gives an exact assessment of the revenue, costs, profits and losses, cash flow dynamics, stock & both raw materials and finished products, loans etc., critical assessment of the finances and its dynamics help in the holistic assessment of the enterprise.

Question 4.
Explain technical feasibility as an element of project report.
Answer:
Technical feasibility gives the brief description of the manufacturing process, design of the product, details of the machinery, equipments, raw material to be used, number of manpower required. It also can provide a flow chart in manufacturing.

Question 5.
State two basic qualities of a good entrepreneur.
Answer:

  • Understanding of the objectives of the business.
  • Understanding of the business environment.

Question 6.
State two features of feasibility plan.
Answer:

  • Defines the objectives of the enterprise.
  • Carries out market survey and analysis.

Question 7.
Explain the role of financial resources for an entrepreneur.
Answer:
Finance is regarded as the life blood of business. Finance is required to buy machinery, raw materials and other inputs necessary to carry on the operation in the enterprise.

Question 8.
State two objects of sales promotion.
Answer:

  1. To introduce new products in the market.
  2. To increase sales in the slack season.

Question 9.
State any two objectives of marketing management.
Answer:
Two objectives of marketing management are:

  1. To understand and apply the demand theory into the practical world.
  2. To have an idea about price output determination under different market situations.

Question 10.
What is the result of applying knowledge, skills, competency and creativity strategically for market orientation?
Answer:
It helps the entrepreneur to understand the customers and their needs market orientation helps the entrepreneur in producing goods and services that would not only meet the current demands but the anticipated demands of the future too.

Question 11.
What do you understand by the term generation of ideas?
Answer:
Generation of ideas is mainly a conscious endeavor to collect ideas from different sources for the purpose of finding a creative solution to a need for problem. Here, different sources are like talking to others, visiting shops and exhibitions, looking through books, specialists, existing entrepreneurs, prospective customers etc.

Question 12.
Name the factors that are involved in sensing opportunities.
Answer:
There are two factors that are involved in sensing opportunities:

  1. Ability to perceive and preserve basic ideas.
  2. Ability to harness different sources of knowledge and information.

Question 13.
What is a debt equity ratio and what does it indicate?
Answer:
The debt, equity ratio is the relationship between total debt and owner’s capital. It is calculated as follows:
Debt equity ratio = \(\frac{\text { Total debt }}{\text { Owner’s capital }}\)

It indicates the long term financial position of a business. It also helps long term creditors about the security of their funds. In a business of lower debt, equity ratio is preferred by the lenders because it ensures involvement of more stake of the entrepreneur than in case of higher debt-equity ratio. It means that it provides a margin of safety to the creditors.

Question 14.
Name any two central level financing institutions.
Answer:

  1. Industrial Development Bank of India (IDBI)
  2. Industrial Finance Corporation of India (IFCI)

Question 15.
Mention two factors on which the channel of distribution depends.
Answer:
Channel of distribution depends on

  1. Nature of market
  2. Choice and preference of consumers.

Question 16.
What are the objectives of branding?
Answer:
There are the following objectives of branding:

  • Brand is broad term which is used to identity a product.
  • Broad in a concrete or an abstract from establishes the identity of the product of a particular organisation that distinguishes it from that of other competitions.
  • All the means of identity to a brand arc included in brand.
  • Brand is a catalyst in the popularity and sales promotion of product.

Question 17.
Name the parameters against which an idea is explained with a suitable example.
Answer:
The parameters against which an idea is tested are product or service identification, application and use level of operation, cost of the product or services, prevalent competition, technical complexities involved, annual turnover and profit margin.

Question 18.
What is the importance of resource for an enterprise?
Answer:
Resources are needed for setting up and running of the enterprise. Physical resources, infrastructural resources, human resources etc., all jointly, make an enterprise. A regular supply of required resources keep the enterprise operational.

Question 19.
Explain ‘care to ecology and environment’ as a social responsibility of an entrepreneur.
Answer:
Production process often causes some sort of pollution. It may be noise, smoke or affluents. Some enterprises are prone to ecological disturbance, still other cause or encourage deforestation, soil erosion or even lead to human and animal health hazards. Entrepreneurs should take the responsibility to keep pollution under controls to provide devices to prevent polluting material from affecting public health. They are required to discipline themselves not to indulge in any activity that vitiate or degrade environment.

Question 20.
Explain the meaning of feasibility study.
Answer:
Feasibility means whether an idea will work or not. Feasibility study means study of how feasible or practical the proposal business Project is. It is a study that analysis various aspects of the proposed business plan including technical, financial, commercial and socio-economic.

Question 21.
State any two functions of IDBI.
Answer:
Two functions of IDBI area:

  1. To co-ordinate the working of the institutions which are engaged in financing, promoting or developing industries.
  2. To fulfill the gaps in the industrial structure of the country by planning, promoting and developing industries.

Question 22.
Give two examples of opportunity cost.
Answer:
Two examples of opportunity cost are:

  1. A building where curtain part remains utilized which could have been rented.
  2. The machinery remains unutilized for certain period which could have been leased.

Question 23.
What are the major components of the fixed capital?
Answer:
The major components of the fixed capital are Cost of land, building, machinery and equipment, testing equipment, office equipment and furniture. It also includes pre-operative expenses.

Question 24.
State any two objectives of preparing a project report.
Answer:
Two objectives of project reports are:

  1. To assess the scope and range of the source of the enterprise before its actual commencement.
  2. To obtain the opinion of experts from various fields viz. technical, financial, marketing, production, legal etc.

Question 25.
What is meant by operational level planning?
Answer:
A plan which shows the steps, procedures and strategies adopted by the entrepreneur in maximising his turnover and production of the enterprise is known as operational level planning.

Question 26.
Availability of resources determines the location of an enterprise. Do you agree? Justify your answer.
Answer:
Yes, it is true that availability of resources determine the location of an enterprise. It is because of the following reasons

  • Cost factor: If sources of resources are near the enterprise then the transportation cost is reduced.
  • Supply factor: The supply of resources is quick if resources are readily available.

Question 27.
Is entrepreneur responsible towards his competitors?
Answer:
Be it any field, it is the competition that paves the way of development. In the competitive environment, an entrepreneur ever remains alert for being constantly ahead of his rivals. As such, not regarding the competitors as enemies, rather reformers, an entrepreneur owes some responsibilities towards his competitors. To maintain healthy relations with the Competitors, one must not intend to harm them. Therefore, it is imperative to promote fraternity with the competitors.

Question 28.
State any four points of importance of entrepreneurship for a country.
Answer:

  1. Contribution of gross domestic product (GDP)
  2. Capital for nation
  3. Employment generation
  4. Generation of business opportunities for others.

Question 29.
Explain how trading related ideas act as idea fields for generation of ideas?
Answer:
Trading refers to buying and selling of goods and services for profit. Today, scope of trade has enlarged to local trade, import, export, e-commerce etc. So, an entrepreneur must have a clear idea of the kind of trading he is willing to be into. Afterwords, this idea further gives him a way to lot more ideas about the place, size and nature of his trading business.

Question 30.
Mention any two techniques of sale promotion with example.
Answer:
The two techniques are:
(i) Rebate: It refers to selling products at a discounted price less than the original price for a limited period of time e.g. soft drink manufacturer company announced 200 ml. bottle of its soft drink minute maid at a price of Rs. 5 instead of regular price Rs. 9 to clear off the stock.

(ii) Refund: This refers to refund a part of price paid by customer on presenting the proof of pruchase, e.g. Rs. 10 off an presentation of empty bottle of Pantene shampoo.

Question 31.
State any two features of venture capital.
Answer:

  1. Investors do not interfere in day-to-day business.
  2. Investment is made in new enterprises using innovative ideas and new technologies.

Question 32.
Why is working capital called the circulating capital?
Answer:
Working capital is also known as circulating capital because working capital depends mainly on length of circulating cycle. Circulating cycle is the time, period between acquisition of raw materials and the collection of cash from receivables. In trading concern, circulating cycle begins with procuring of goods to be sold and ends with realisation of cash from debtors after the sale of these goods.

The length of operating cycle helps in estimating the working capital requirement. Longer the circulating cycle, larger will be the working capital requirement because in circulating cycle cash flow keeps going out and cash comes only at the end of circulating cycle.

Question 33.
What are the three types of resources basically required while setting up of an enterprise?
Answer:
The resources basically required while setting up of an enterprise may be classified as follows:

  1. Physical and technological resources
  2. Human resources
  3. Financial resources

Question 34.
Explain the financial resources.
Answer:
An important requirement for the success of a business organisation relates to raising of sufficient amount of funds for financing various investment opportunities. No business enterprise can prosper until it has got sufficient financial resources as its disposal to install latest machines and equipment, plants and buildings, meet day-to-day expenses, arrange for the transport of raw materials and finished products and pay wages and salaries.

Question 35.
Why is packaging called a silent salesman?
Answer:
Packaging helps to provide an identification to the product with necessary details, as well as attractive packing encourages like a salesman to people to purchase a product. Thus it is called a silent salesman.

Question 36.
What are the working capital is majured?
Answer:
Availability of enough working capital is indicative of liquidity of business and capacity to make prompt payments working capital is needed for making payment of day-to-day expenditure, for meeting current liabilities and for availing benefit of cash discounts.

Question 37.
Is the equality control necessary for all industries?
Answer:
yes, maintaining quality control necessary for all industries units. However this is greatly necessary for manufactures in the small scale sector because these manufacturers employ human resources to a greater extent in the manufacturing pressure. But, because of various limitations quality control in maintained to a very limited extent. These factors are related to lack of finances, technical competency and absence of proper noun content.

Question 38.
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 project as general of electricity, irrigation, cement manufacturing and chemical industry etc. The main object of such products is to prevent environmental pollution.

Question 39.
What is channels of distribution?
Answer:
Morely the production of goods is not enough but to dolinar if to consumer is also essential. In order to ensure the delivery of the goods to its ultimate consumer, the produces/manufacturers seek the services of several mediators, like wholesalers, retailers or agents which are called channels of distribution. The distribution channel here refers to the medium or all those means which ensure the access of goods to the ultimate consumers. These channels are also known as vehicles of distribution or business mediators and have seal of the proprietor.

Question 40.
What is innovation? Why it is needed for growth?
Answer:
If an wine is scaled into a new bottle, the act will soon expose the tricks, as such, this strategy can not lead to growth. Thus, a successful entrepreneur bring about some radical changes in the product services which was not existing before and the consumers were not much benefited with the pre-existing product. It is the innovation that can guarantee growth.

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