PRE-BOARD EXAMINATION 3

2023-24
Class XII: ENTREPRENEURSHIP (066)

Time Allowed: 3 Hours M.Marks: 70

General Instructions: 03/12/2023

SECTION A
1. An economic idea which can be implemented to create a business enterprise and 1
earn profits must possess –

a. Practicability of the idea

b. Competence of the entrepreneur to encash it
c. Potential of future growth
d. All of the above

2. Rushan devised an apparatus to measure the quality of air at home, which can be 1
fitted in any Air conditioner, and the air conditioner can become an air purifier as
well. His product is still in the pre-commercialization stage. Rushan wants to
exclude others from making, using, selling and importing this apparatus. The
intellectual property right which Rushan will have to obtain is:

a. Copyright
b. Patent
c. Industrial design
d. Trade mark

3. From the information given below, calculate the circulating capital of a company – 1

Assets Amount (Rs.) Liabilities Amount (Rs.)

Stock 70,000 Trade payables 20,000
Debtors 55,000 Short-term loans 10,000
Cash 60,000 Outstanding 15,000
expenses
Short-term 20,000
investments

a. Rs.1,00,000
b. Rs.2,05,000
c. Rs.1,60,000
d. Rs.3,65,000
4. In 2018, Varsha started ‘Happysmile Ltd.’, a new company that manufactures 1
toothpaste. They want to enter the market in an aggressive manner and want to
capture as much market share as possible as well as be relieved of the problem of
distribution. They want to make their product available to everyone, everywhere.
Finances are not their concern. They are willing to spend a generous amount and
hire intermediaries so they can reach as many customers as possible. In 2020, due to
the pandemic they were forced to control their finances and therefore, could afford
only one intermediary to help them.
Identify their channel of distribution in 2018 and 2020 respectively.

i. Zero level
ii. One level
iii. Two levels
iv. Three levels

a. i and iii
b. iv and ii
c. ii and iii
d. iv and i

5. Ashwin was working as Director Finance in Ambur Metal Works. Managing 1

Director of the Company Kailash asked Ashwin to draft a proforma investment
decision plan enlisting the funds which should be invested in different assets so that
the company can get the highest possible returns. From the following identify the
reason(s) that would help Ambur Metal Works.

i. It will help the company to understand the total amount of funds required.
ii. It will also help the company to assess the situation as to whether they
have excess or inadequate funds.
iii. It helps the company to understand the various sources of funds
iv. It helps the company to reflect the position of the business at the end of
every year

a. i only
b. i and ii only
c. i and iii only
d. i, ii, and iii only
6. ‘Sidvi Ltd’. is a leading company in the manufacturing of plush toys for children. 1
The company is in process of developing a prototype for a talking pillow, ‘Cuddle
Talk’, which would enable parents to convey their message to children when they
are away at work. The mechanism is such that the message is recorded in a device in
the pillow and the moment the child touches the pillow; the speaker sensor would
repeat the message recorded by the parents for their children.
Though an innovation for India, imported versions of this product are already
available in the market. The management wants to devise a pricing strategy to target
the ‘switchers’ present in the market.
Identify the pricing strategy that the management is planning to adopt.

a. Variable pricing
b. Skimming pricing
c. Penetration pricing
d. Cost plus pricing

7. Kunal is the stock keeper of Soft Designs Ltd. The company is into converting 1
cotton yarn into fabric and then further computerized printing on the same to add
value to the fabric. He wants to know the ideal quantity of yarn to be ordered so that
the production process does not stop. How can he know the correct time to place an
order?

i. By calculating Break-even point

ii. By calculating Re-order point
iii. By calculating Economic Order Quantity
iv. By calculating Lead Time

a. iii and iv
b. i and ii
c. ii only
d. i, ii and iii

8. Sheej industries started manufacturing ice-creams under the brand name 'ColdYum'. 1
The company decided to use 3D graphic techniques which will be projected on
buildings. They chose several high raise buildings all over major metropolitan cities
and started their advertising campaign. What form of media is the company using?

a. Television
b. Point of sale
c. Ambient
d. Cinema

9. Which of the following satisfies the tastes of savers and the needs of investors 1
through its various financial instruments and institutions?

a. Capital market
 b. Financial institutions
c. Private placement
d. IPO

10. Sarah started the first Organic store in 2015 on the Bengaluru – Mysuru highway. 1
Today it has grown into ₹ 25 crores turnover organic retail chain with eight stores.
Buying the agricultural products from the farmers and selling them at ‘Organic
stores’, Sarah has not only provided a direct market to the farmers, but also has built
a ₹ 14 crore turnover organic retail chain. Which idea field has Sarah taken up?

a. Natural resources
b. Service sector
c. Trading related
d. Existing products or services

11. Which flotation method does not require any brokers, agents, underwriters, 1
prospectus or enlistment, etc?

a. Primary market
b. Rights issue
c. Private placement
d. Offer to employees

12. Assertion (A): 'Branding' is a process, a tool, a strategy, an orientation whereby a 1

name, a sign, or a symbol etc. is given to a product by the entrepreneur so as to
differentiate his/her product from the rival products.
Reason (R): Once a brand name is established in the market, it becomes difficult to
compete with it.

a. Both Assertion (A) and Reasoning (R) are true and Reason (R) is the correct
explanation of Assertion (A)
b. Both Assertion (A) and Reasoning (R) are true but Reason (R) is not the
correct explanation of Assertion (A)
c. Assertion (A) is true but Reason (R) is false
d. Assertion (A) is false but Reason (R) is true

13. Assertion (A): A capital market may be defined as an organized mechanism meant 1
for effective and smooth transfer of money capital or financial resources from the
investors to the entrepreneurs.
Reason (R): Here, productive capital is raised and made available for industrial
purposes.

a. Both Assertion (A) and Reasoning (R) are true and Reason (R) is the correct
explanation of Assertion (A)
b. Both Assertion (A) and Reasoning (R) are true but Reason (R) is not the
correct explanation of Assertion (A)
 c. Assertion (A) is true but Reason (R) is false
d. Assertion (A) is false but Reason (R) is true

14. Payal has completed her Bachelor of Business Administration from Dwarka, Delhi. 1
She thought of an attractive economic idea, which could be implemented to create a
business, earn profits, and ensure further growth. The idea was to link the Indian
talent with handicraft and to promote it at international level. The customers can
order products as per their liking. Identify the concept discussed above.

a. Business opportunity
b. Market Assessment
c. Product Identification
d. Problem Identification

15. Oppo is a leading mobile phones manufacturer in India. The company decided to 1
launch a new model which will have inbuilt software for hand-free use and enhance
the customer experience through 3D photos. They are also looking into ideas to use
eco-friendly recyclable materials for the body of the phones that may cause
negligible damage to the environment. Identify the factor of the PESTEL model
discussed here.

a. Social and Political

b. Ecological and Technological
c. Economic and Social
d. Legal and Economic

16. Assertion (A): Sensitivity to environmental factors is crucial for an entrepreneur. 1

Reasoning (R): If a company is able to adapt to its environment, it would succeed in
the long run.

a. Both Assertion (A) and Reasoning (R) are true and Reason (R) is the correct
explanation of Assertion (A)
b. Both Assertion (A) and Reasoning (R) are true but Reason (R) is not the
correct explanation of Assertion (A)
c. Assertion (A) is true but Reason (R) is false
d. Assertion (A) is false but Reason (R) is true

17. Priya joins a Publication Company that publishes a monthly magazine “Lifestyle”. It 1
covers articles related to fitness, clothing, gadgets, cooking etc. Priya had joined the
clothing division of the magazine. Her divisional head explained to her the nature of
work of work of the division. She also informed Priya that in addition to visit to local
mall, she would have to attend ‘Power launches’ on the first Monday of every month.
Out of the following, identify the way of spotting trend, the divisional head is talking
about.

a. Talk trend
 b. Watch trend
c. Read trend
d. Think trend

18. The United Nations has declared 2023 as the International Year of Millets. Many 1
start-up firms were influenced with this news and have started to create their own
version using millets. One such company was 'Young You'; they created a new
variety of products using millets which was targeted at the young generation. Which
of the following stage of enterprise process has the company followed in the above
case?

a. Opportunity spotting by analysing the needs and problems that exist in the
environment
b. Evaluating the ideas received from different sources to find a creative
solution
c. Identifying a product or service through innovation
d. Setting up a project and nurturing it to success

SECTION B
19.a. State any four ways in which creative ideas can be generated. 2

OR

b. State any four sources which lead to the emergence of basic ideas.

20. Happy Drink is a manufacturer of water purifiers. The company has developed a 2
new water purifier that not only converts the hard water into soft water but also
kills the bacteria and other harmful micro-organisms present in it. The company
has named this water purifier ‘Safe Aqua’ and for its marketing, appointed
salesmen throughout the country. The company also trained the salesmen to
provide information about the usefulness of ‘Safe Aqua’ water purifiers to the
customers and motivate them to buy the same.
Identify and explain the type of promotion used by the company.

21. There has been a sizeable class shift in China over the past few decades and the 2
consumers are far more diverse than it once was. It is also completely detached
from markets elsewhere in the world and many companies have sunk in China
because they failed to consider consumer preference.
Identify and explain the PESTEL model depicted here.

22.a. “Successful launch of a product depends upon various factors. Entrepreneurs must 2
keep in mind the various ways of reaching the customers and persuade them to buy
their products.” Comment on any two such methods used by an entrepreneur in
attracting the customer to buy their product.
 OR

b. How is franchising a better option for external expansion in the case of start-ups?

23. Generating ideas is a relatively easy exercise, especially if it is done in groups. 2

However, this process can also become a wild goose chase because all ideas need
not necessarily become sound business opportunities. One must assess it in terms
of the potentiality of the opportunity.
Comment on the first two steps involved in this type of investigation.

24. a. Calculate the Economic Order Quantity from the following information: 2
a. Annual consumption – 120units
b. Cost of placing and receiving an order – Rs.20
c. Price per unit – Rs.100
d. Storage cost as percentage of average inventory – 12%

OR

b. A hotel had varying number of guests during five weeks. The information
regarding the number of guests and the average weekly billing is presented in the
following table:
Week No. of guests Average billed amount
(Rs.)
1 240 300
2 120 410
3 140 292
4 160 442
5 180 480

(a) What is the ‘Unit of Sale’ and “Unit Price’ in this case?
(b) If the cost of goods sold or variable cost is 60% of the sales price, calculate
the ‘unit cost’ and the gross profit’.

SECTION C
25. This concept is an identifying symbol for any product or business. It can be any 3
distinctive design, mark, sign which stands associated with the enterprise. Enlist
any three purposes of this concept.

26.a. Why are private companies preferred over public companies? 3

OR

b. What are the consequences of non-registration of a partnership firm?

27. ‘Floral Art and Craft’ opened its first store in Mumbai in the year 2010with the 3
objective of providing its customers with fresh flowers creatively packed and value
for money. It procures fresh flowers directly from the farmers. The organization
makes sure that the farmers adopt organic means to nourish the soil and do not use
chemical fertilizers as it degrades the soil fertility. Packaging material is procured
from specially abled crafts man of I CAN. Floral Art and Craft’s face book and
twitter page encourages two way communication with its customers. These social
media channels provide a platform through which it can interact with customers
and access their opinion about the brand. The store also uses direct e-mails to their
frequent customers to inform them about different schemes and other promotional
messages. Its website promotes the store by organizing different flower decorating
classes and competitions using the products of I CAN.
a. Identify the promotion strategy adopted by I CAN.
b. State any two features of this type promotion strategy.

28. ‘Business plans are decision-making tools.’ Examine the statement. 3

29.a. State the role of an angel investor in an entrepreneurial pursuit. 3

OR

b. Evaluate the following options available for an entrepreneur to raise funds from
the primary markets –
a. Rights Issue
b. Private Placement
c. Offer to employees

SECTION D
30.a. Define franchise agreement. Enumerate its ingredients. 5

OR

b. State the advantages of franchising to franchisee.

31. State how obtaining venture capital is different from raising loan from a lender. 5
Also, state areas where venture-capitalists decide to invest.

32.a. ‘Ability to perceive and preserve basic ideas’ is an important factor involved in the 5
process of sensing opportunities.
Identify and state sources that lead to emergence of these basic ideas.

OR

b. Explain the first five steps in idea and opportunity assessment.

33. Radha started a coffee shop in Chandigardh with a capital of Rs.9,00,000. She took 5
a loan of Rs.5,00,000 from State Bank of India at 9% interest per annum. During
the year ended 31st March 2022 her sales were Rs.20,90,000 and the cost of goods
sold was Rs.15,30,000. She paid monthly rent of the shop Rs.11,000 and a
monthly salary of Rs.25,000 the employees. The tax rate is 30%.
Calculate Return on Equity and Return on Investment.

34. “It is a system whereby there is achieved a smooth and coordinated flow of work 5
within the factory so that, by planning and control of all the productive operations
in all the stages of manufacture, the final product is completed in accordance with
the plans.” For achieving such plans entrepreneurs specifically pay attention to the
different elements of this plan.
a) Identify the plan mentioned above.
b) Explain different elements involved in it.