Bihar Board 12th Entrepreneurship Model Question Paper 1 in English Medium

Bihar Board 12th Entrepreneurship Model Papers

Bihar Board 12th Entrepreneurship Model Question Paper 1 in English Medium

Time: 3 Hours 15 Min
Marks: 70

Instructions for the candidates:

1. Candidates are required to give their answers in their own words as far as practicable.
2. Figures in the right-hand margin indicate full marks.
3. 15 minutes of extra time has been allotted for the candidate to read the questions carefully.
4. This question paper has two sections: Section – A and Section – B.
5. In Section – A, there are 35 objective type questions which are compulsory, each carrying 1 mark. Darken the circle with black/blue ball pen against the correct option on OMR Sheet provided to you. Do not use Whitener/ Liquid/Nail on OMR Sheet, otherwise, the result will be treated as invalid.
6. In Section – B, there are Non-objective type questions. There are 18 Short answer type questions, out of which any 10 questions are to be answered. Each question carries 2 marks. Apart from this, there are 6 Long answer type questions, out of which any 3 of them are to be answered. Each question carries 5 marks.
7. Use of any electronic device is prohibited.

Objective Type Questions

Question No. 1 to 35 has four options provided out of which only one is correct. You have to mark, your selected option, on the OMR-Sheet. Each question carries 1 (one) mark. (35 × 1 = 35)

Question 1.
The term ‘Fund’ as used in Fund Flow Analysis means:
(a) Cash only
(b) Current Assets
(c) Current Liability
(d) Excess of current Assets over Current Liabilities.
Answer:
(d) Excess of current Assets over Current Liabilities.

Question 2.
Networking capital means:
(a) C.A – C. L.
(b) C.A. + C.L.
(c) C. L. – C.A.
(d) None of the above
Answer:
(a) C.A – C. L.

Question 3.
A. E. P. = _________
(a) \(\frac { FixedCost }{ \frac { P }{ V } Ratio }\)
(b) \(\frac { FixedCost }{ \frac { P }{ V } Ratio } \times 100\)
(c) \(\frac { \frac { P }{ V } Ratio }{ FixedCost }\)
(d) None of these
Answer:
(b) \(\frac { FixedCost }{ \frac { P }{ V } Ratio } \times 100\)

Question 4.
Risk Capital Foundation was established in
(a) 1970
(b) 1975
(c) 1986
(d) 1988
Answer:
(b) 1975

Question 5.
Capital Intensive technique is favoured due to:
(a) Rapid economic growth
(b) Social influence
(c) Increase in employment opportunities
(d) All of the above
Answer:
(d) All of the above

Question 6.
Management is an art of:
(a) doing work himself
(b) taking work from others
(c) both for doing work himself and taking work from others
(d) All
Answer:
(c) both for doing work himself and taking work from others

Question 7.
Out of the following which is the method of quality control?
(a) Inspection method
(b) Statistical Quality Control Method
(c) Both A and B above
(d) Neither A nor B above
Answer:
(c) Both A and B above

Question 8.
Dividend paid on cumulative preference share:
(a) In the year of profit
(b) In the year of loss
(c) In the year of profit or loss
(d) None of these
Answer:
(a) In the year of profit

Question 9.
The best example of variable cost is:
(a) Interest on capital
(b) Material cost
(c) Wealth tax
(d) Rent
Answer:
(b) Material cost

Question 10.
Generally, diversification is classified in
(a) Two ways
(b) Three ways
(c) Four ways
(d) Five ways
Answer:
(c) Four ways

Question 11.
Is it necessary to give due consideration on internal resources
(a) Yes, it is necessary
(b) No, not necessary
(c) Necessary for external resources
(d) None of the above
Answer:
(a) Yes, it is necessary

Question 12.
Incentives are not concerned with:
(a) Rebate
(b) Exemption from Tax
(c) Provision of seed capital
(d) Lump-sum payment
Answer:
(c) Provision of seed capital

Question 13.
Which of the following is known as Market Demand?
(a) Demand Forecasting
(b) Real Demand
(c) Supply
(d) None of the above
Answer:
(a) Demand Forecasting

Question 14.
Which of the following factors are to be considered while selecting a product or service?
(a) Competition
(b) Cost of production
(c) Profit possibility
(d) All of the above
Answer:
(d) All of the above

Question 15.
Selection of an enterprise depends on:
(a) Sole Trading
(b) Right of Entrepreneur
(c) Self Ability of Entrepreneur
(d) None of the above
Answer:
(d) None of the above

Question 16.
An entrepreneur prefers which form of an organization if production is to be undertaken on a small scale basis?
(a) Sole Trader
(b) Partnership
(c) Company
(d) None of the above
Answer:
(a) Sole Trader

Question 17.
Project identification deals with:
(a) Viable Product idea
(b) Logical opportunity
(c) Effective demand
(d) None of these
Answer:
(a) Viable Product idea

Question 18.
The techno-economic analysis deals with the identification of the
(a) Supply potential
(b) Demand potential
(c) Export potential
(d) Import potential
Answer:
(b) Demand potential

Question 19.
Project appraisal is an/a
(a) Export Analysis
(b) Expert Analysis
(c) Profitability Analysis
(d) None of the above
Answer:
(c) Profitability Analysis

Question 20.
Various public utility undertaking has to invest heavily in:
(a) Current Assets
(b) Fixed Assets
(c) Fictitious Assets
(d) None of the above
Answer:
(b) Fixed Assets

Question 21.
Pay-back period deals with:
(a) The period required for-profit earning process
(b) The period required for the cost of investment recovery
(c) The period required for fixed cost recovery
(d) None of the above
Answer:
(b) The period required for the cost of investment recovery

Question 22.
The project life cycle is not concerned with the following:
(a) Pre-investment stage
(b) Constructive stage
(c) Normalisation stage
(d) Stabilisation stage
Answer:
(d) Stabilisation stage

Question 23.
Which of the following is the main problem connected with business?
(a) Profit
(b) money
(c) Sales
(d) Risk Management
Answer:
(d) Risk Management

Question 24.
What creates perfection in .the market which ultimately increases the volume of sales & profit?
(a) Innovation
(b) Promotion
(c) Marketing
(d) None of the above
Answer:
(c) Marketing

Question 25.
Short-term forecast involves a period of how many months?
(a) 12 months
(b) 24 months
(c) 18 months
(d) 36 months
Answer:
(a) 12 months

Question 26.
Business Regulatory framework is concerned with what
(a) Direction of Business
(b) Volume of Business
(c) Regulation
(d) None of the above
Answer:
(b) Volume of Business

Question 27.
The product which is more in demand are more
(a) Less profitable
(b) Possible
(c) More profitable
(d) None of the above
Answer:
(c) More profitable

Question 28.
Out of the following formulating of the general plan of a business depends?
(a) Project Report
(b) Plant and Product Planning
(c) Marketing Planning
(d) Financial Planning
Answer:
(d) Financial Planning

Question 29.
What break-even point shows:
(a) Profit
(b) Loss
(c) Neither Profit nor Loss
(d) None of these
Answer:
(c) Neither Profit nor Loss

Question 30.
The best example of Fixed cost is:
(a) Interest on capital
(b) Material cost
(c) Wealth Tax
(d) None of these
Answer:
(a) Interest on capital

Question 31.
What is the thing that enterprise do? The paths they follow and the decision they take in order to reach certain points and levels of success:
(a) Production
(b) Distribution
(c) Marketing
(d) Strategies
Answer:
(d) Strategies

Question 32.
Out of the following, what is essential to study in the feasibility study?
(a) Cost
(b) Price
(c) Operation
(d) All of the above
Answer:
(d) All of the above

Question 33.
What is included in the nature of marketing?
(a) Product Planning
(b) Classification of product
(c) Consumer
(d) Customer
Answer:
(c) Consumer

Question 34.
Social behaviour is not concerned with:
(a) Production of goods for public
(b) Avoidance of unethical behaviour
(c) Fulfilment of social obligations.
(d) Profit earning process
Answer:
(d) Profit earning process

Question 35.
Business opportunity relates to:
(a) Commercially feasible project
(b) Personal feasible projects
(c) Neither A nor B above
(d) None of the above
Answer:
(a) Commercially feasible project

Non-Objective Type Questions

Short Answer Type Questions

Question No. 1 to 18 are short answer type. Answer any 10 questions. Each question carries 2 marks. (10 × 2 = 20)

Question 1.
Why is entrepreneurship regarded as a creative activity?
Answer:
Entrepreneurship is creative in the sense that it involves the creation of value. By combining the various factors of production, entrepreneurs produce goods and services that meet the needs and wants of society. Every entrepreneurial act results in income and wealth generation. Even when innovations destroy the existing industries.

Entrepreneurship is creative also in the sense that it involves innovation introduction of new products, the discovery of new market and sources of supply of inputs, technological break thoughts as well as the introduction of newer organisational forms for doing things better, cheaper, faster and in the present context, in a manner that causes the least harm to the environment. It is possible that entrepreneurs in developing countries may not be pioneering innovative in introducing path-breaking, radical innovations.

Question 2.
What do you understand by Micro Environment?
Answer:
The microenvironment is the first pillar to build a business empire. All marketing plans, strategies and objectives are carried out through these components. It is, therefore, the executive arm of business where the practical implementation of ideas, thoughts, and concepts are done and based on the responses of these components, a business either moves forward or may step back.

Question 3.
What do you mean by market environment?
Answer:
Marketing Environment is the combination of external and internal factors and forces which affect the company’s ability to establish a relationship and serve its customers. The marketing environment of a business consists of an internal and external environment.

Question 4.
What is the object of project appraisal?
Answer:

• To extract relevant information for determining the success or failure of a project.
• To apply standard yardsticks for determining the rate of success or failure of a project.
• To determine the expected costs and benefits of the projects.
• To arrive at specific conclusions regarding the project.

Question 5.
What is factoring?
Answer:
Factoring is a transaction in which a business sells its invoices, or receivables, to a third-party financial company known as a “Factor”.
Factoring is known in some industries as “accounts receivables financing”.

Question 6.
Give the definitions of Fund Flow Statement.
Answer:
A fund flow statement is a statement prepared to indicate the increase in the cash resources and the utilisation of such resources of business during the accounting period.

Question 7.
What do you mean by Ratio Analysis?
Answer:
Ratio analysis is the process of determining and interpreting numerical relationships based on financial statements. A ratio is a statical yardstick that provides a measure of the relationship between variables or figures. This relationship can be expressed as a percent.

Question 8.
How is break-even point determined?
Answer:
Break-even analysis related to the study of cost and return investment in relation to the sales of a business unit. That point or level of sales at which the business makes no profit and no loss is termed as the break-even point. Break-even point can be applied from two viewpoints- Narrow viewpoint and broad viewpoint, from the narrow viewpoint break-even analysis is a technique which determines that level of work at which the total return is equal to total expenditure. That is why this is known as the point of no profit no loss.
Break-point is the point at which the following characteristics are observed:

• The firm is neither earning any profit nor undergoing any loss i.e. it is in a state of no profit no loss.
• The total return of the firm is equal to the total cost.
• Amount of contribution (Sales-variable cost is) equal to the fixed cost.

Because of the above characteristics of the break-even point, it is also known as ‘Equilibrium point’ or ‘balancing point’ ore ‘critical point’.

Question 9.
Who is an Entrepreneur?
Answer:
The term ‘entrepreneur’ was first introduced in economics by the early 18th-century French economist Richard Cantillon. The entrepreneur as the agent who buys means production at certain prices in order to sell the produce at uncertain prices in the future. “ Since then a perusal of the usage of the term in economics shows, that entrepreneurship implies risk uncertainty bearing coordination of productive resources; introduction of innovation; and the provision of capital.

Question 10.
State the two objectives of identification of business opportunities.
Answer:
Following are the objectives of identifying business opportunities:

• Identify the sources of business ideas.
• Explain methods for generating business ideas.
• Identify various entrepreneurial opportunities.
• Understand the nature of the occupational and geographical mobility of entrepreneurs.

Question 11.
Give any two objectives of environmental scanning.
Answer:
Two objectives of environment scanning are mention below.

• Environmental scanning is the process of gathering information about the event and their relationship within an organisation’s internal and external environments.
• Environmental scanning is to help management determine the future direction of the organisation.

Question 12.
Mention any two objects of the project report.
Answer:
Two objectives of project report are following.

• To evaluation of environment opportunity.
• It is necessary to present the report for taking financial help.

Question 13.
What do you’re mean by the cycle of working capital?
Answer:
Availability of enough working capital is indicative of liquidity of business and capacity to make prompts payment. Working capital is needed for making payment of day to day expenditure for meeting current liabilities and for availing benefit of cash discount.

Question 14.
Why time boundness is essential in a project?
Answer:
Project is a written account of various activities undertaken by a firm or entrepreneurs and their technical, commercial and social feasibilities. Project is made after analysis of essential document therefore there is a time limit for making project because of the project is made for particulars time and subject.

Question 15.
What is the marketing mix?
Answer:
Marketing mix implies a combination of all marking elements or ingredients so that the objective of the enterprise may be realised. The marketing mix is the appointment of effort the combination the designing and the integration of the elements of marketing into a programme or mix which on the basis of the marketing forces will best achieve the objectives of an enterprise at a given time.

Question 16.
List any two problems faced by first-generation entrepreneurs?
Answer:
List of problems faced by first-generation entrepreneurs.

• Business ideas issues.
• Lack of finance.
• Inability to market their business.
• Not knowing how to plan the business.
• Legal question.

Question 17.
What do you mean by market assessment?
Answer:
Market Assessment: Goods are produced and facilitate for providing services are created in anticipation of their demand the ultimate aim of these activities is that these reach these for whose these are meant. The commodities are needed for consumption and used by the ultimate consumers. The services are utilized by whose Who was want to derive satisfaction out of them.

Question 18.
What is market observation?
Answer:
Market observation is a market research techniques in which highly trained researchers generally watch how people or consumers behave and interact in the market under natural conditions. It is designed to give precisely detailed and actual information on what consumers do as niche.

Long Answer Type Questions

Question No. 19 to 24 are long answer type. Answer any 3 questions. Each question carries 5 marks. (3 × 5 = 15)

Question 19.
Why the environmental study is essential for an entrepreneur?
Answer:
The process of environmental scanning and analysis is very important to an entrepreneur. The evaluation of the existing changing circumstances the forecasting and the consequent impacts need to be assessed by an entrepreneur prior to determining his policies and planning and their successful implementation. It is essential to evaluate and analyse the consequences of the changing business environment prior to giving a tangible shape to the planning and policies.

The technical innovation, new social values, problems of the community, product – market conditions etc. Must be subjected to study which is instrumental in converting strategies and planning into reality. The competitive environment and its consideration is also an integral part of environmental scanning. To plan or conceive the counter-strategies in view of the competitive threats, the environmental study and analysis is the pre-requisite in this regard by a close study and a survey of the competitive threats, the environmental.

Question 20.
How would you execute the set up of an enterprise?
Answer:
The study of these five constituents is essential for the emergence of an enterprise.

• Labour or men: In all the resources of production, the ingredient of labour is the most mobilising element that stimulates all other factors and turns even the most useless thing into a useful one.
• Raw material: If the enterprise is production oriented a prior arrangement should be emphasised with regard to availability, type, cost/price and regular supply of the raw materials.
• Machine: Whatever be the scale of the enterprise whether big or small, machines are required in either case.
• Money: Money/capital is the lifeblood of an enterprise without which the establishment is an inconceivable presumption. The capital in the long and short term and its amount and the capital resources are a pre-emptive requirements
• Market: A prior estimate is to be formed in terms of the market-consumption before the establishment of the enterprise.
• Place: It is also an important aspect and be decided where the enterprise should be set up.

Question 21.
What problems should be properly considered in the expansion of a business enterprise? Elucidate.
Answer:
(i) Cash flow management: Cash flow problems are the second most common reason why small businesses go but according to research from CB Insights. Owners have to spend money to make money during a growth period, but this concept can quickly get out of control and leave you in a precarious position.

(ii) Responding to the competition: A funny thing happens when your company is successful- others recognize the opportunity and enter the industry. Many small business owners are unprepared for the realities of fierce competition, and they quickly lose their way in an attempt to respond.

(iii) Nurturing a great company culture: Your company culture is affected by everyone involved with your organization. As you grow and more people come into your company’s orbit, it becomes more difficult to exert control over your culture and you run the risk of having it drailed.

(iv) Learning when to delegate and when to get involved: There are times when entrepreneurs need to get personally involved in specific decisions, such as big – picture strategic planning and hiring for key positions. Then there are times where it is important to delegate and trust that your managers will make the best decision for their team and the company.

(v) Keeping up with market changes: If your company operates in a sector that experiences frequent upheaval, you have to be prepared for constant change. Internalize the idea that disruption is the new normal and work on training your employees to be agile in the face of uncertainty.

(vi) Deciding when to abandon a strategy: Sometimes marketing channels that seemed full of potential don’t pan out and new product lines don’t catch on as anticipated failures are an important part of business growth and owners must train themselves to recognize where they occur, divert resources accordingly and learn from those mistakes.

Question 22.
Describe the factors affecting working capital.
Answer:
Factors affecting the working capital:
There are the following factors affecting the working capital as:
(i) Nature and size of Business: The working capital depends on the nature of the business to a great extent. If a business is engaged in the production process more working capital will be required on other hand business firms engaged in trade activities will ‘require less working’ capital.

(ii) Business cycles: The need for working capital keeps on increasing or decreasing according to the business cycle. During Boom periods the businessman tries to keep the maximum possible stock of goods in order to escape from the price increase.

(iii) Term of Buying & Selling: If businessman buy the necessary material for cash he requires more working capital. If the business unit has the policy of credit sales, more working capital will be required.

(iv) Duration of Production: The amount of working capital also depends upon the time taken in the manufacturing of a product. If the time required for the manufacture of the product is more, more working capital is needed to be.

(v) Volume & Procurement of Raw Material: If the amount to be spent on raw material is more in total investment more working capital will be required.

(vi) Manual Vs Automation: If a business unit uses automatic machines for production less working capital will be required. If the production is labour oriented like the workers engaged in tea, coffee, rubber etc. More working capital will be required.

(vii) form of Taxation: Government policy of taxation also influences the need for working capital more capital will be required if all taxes are to be paid in advance, otherwise, the need will be less.

(viii) Seasonal goods: If business units are engaged in such goods in which seasonal conditions play an important role need for working capital will be felt according to seasonal requirements.

(ix) The intensity of competition: If the market competition is intense, more amount of working capital is required as a competitive firm has to keep huge quantities of a long-range of products.

(x) Business growth: If a business is expanding it requires more money for raw materials wages etc.

Question 23.
What are the factors affecting the identification of business opportunities?
Answer:
Responsibilities of each entrepreneur of the environment are any kind of tampering with the environment in terms of filing, pollution, contamination, etc. is a serious offence which is causing great harm to the present generation. In assertion, it is raising a question mark on the fate of the coming generation. No doubt, the industrial units do cause pollution, more or less, to the environment, and it is the prime responsibility of an entrepreneur not to harm the environment in any way. The industrial waste, raw residual, etc., must not be thrown into the water, its right use should be encouraged. Personal profit should not be the sole consideration here to the extent that the environment is polluted. The government is very serious about it and does not permit, even then an entrepreneur ought to be considerate at his own in this regard.

Question 24.
Explain the meaning, definition and objective of Financial Management.
Answer:
The financial manager in order to achieve the objectives of financial management performs many functions:
(i) Estimating the financial requirements: The financial manager has to estimate the financial requirements both for long and short periods. The long term financial needs means for procuring fixed assets and part of current assets and short term requirements are meant for providing the current assets.

(ii) The decision about capital structure: After estimating the longterm financial requirements the next step is to decide about the sources from where these funds would be raised. The financial manager explores and assesses the various long-term sources in the light of requirements of the enterprise and then decides what specific sources to tap and low much to raise form each of these in the overall interest of the organisation.

(iii) Dividend Decision: It is for the finance manager to make suggestions in respect of dividend payment. He looks into the trends of earnings, share market prices the funds required for future growth, the cash flow situation, etc and recommends to the top management how much of earnings should be earmarked for payment of dividend and how much should be retained in the business.

(iv) Cash management: The finance manager has to ensure that adequate cash is available for various purposes with minimum cost, that the rate of cash inflow is accelerated and that of cash outflow decelerated, that suitable arrangements exit for meeting situation of foreseen or unforeseen shortage of cash and that adequate steps are taken to keep at the bare minimum level cash lying idle with the cashier and or at the bank.

(v) Report with investors: Many parties like financial institutions, banks, underwriters, public etc. Invest money in the organisation, the finance manager establishes close links with them, supplies them the necessary information and negotiates to get financial assistance from them.