UNIT–2: ENTREPRENEURIAL PLANNING

CBSE BOARD QUESTIONS FROM PREVIOUS YEARS

YEAR 2019
1 Why is a company called an ‘artificial person’? 2
Ans

2 Prerna is a sole proprietor. Over the past decade, her business has grown from operating a 3
neighbourhood corner shop, selling accessories such as artificial jewellery, bags, hair clips
and nail art to a retail chain with three branches in the city. Although she looks after the
varied functions in all the branches, for better management of the business she is thinking
to convert her sole proprietorship into some other form of business. She also has plans to
open branches countrywide. However, she is afraid of the fact that in case the business
incurs losses, her personal property may be called upon to pay the business debts. She is
also feeling that she may not be able to effectively manage a large business because of her
deteriorating health.
(a) Identify and explain the features of sole proprietor business highlighted in the above
case.
(b) Also suggest to her the form of business organisation which will help her in continuing
her business, stating reason in support of your answer.
Ans

3 ‘‘In spite of certain restrictions imposed on a private company, it enjoys certain privileges 4
under the Companies Act and a substantial number of entrepreneurs prefer to form a
private company.’’ Comment.
Ans

4 Abhimanyu Industries Ltd. had a team of professionals and experts to draft a 6

comprehensive yearly document with all the relevant details of internal and external
elements in managing the venture. This document acts as a decision-making tool for the
management. The Chief Executive Officer of the company always pays special focus on
one element of this document that ensures the orderly flow of materials from raw state to
finished product with a proper system of quality control, as according to him ‘work your
plan’ is more important than ‘plan your work’.
(a) Identify the ‘comprehensive yearly document’ being prepared by Abhimanyu
Industries.
(b) How is this plan a ‘decision-making tool’ for the management?
(c) Identify the element that is the priority of the CEO of the company.
(d) Why is the element as identified in (c) important?
Ans

YEAR 2020
5 Samar is a budding rural entrepreneur who is working on improving the health index of 1
the women in rural areas. Samar needs to understand various health issues confronted by
women in order to create a socially committed organization. For this, he wants to gather
information about the target market or customers in an organized manner. This organized
effort of Samar is known as ______.
Ans

6 ______ feature of partnership states that any partner can act on behalf of the firm. 1
Ans

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7 A financial plan is a projection of key financial data about the potential investment 1
commitment needed for the new venture. TRUE/FALSE
Ans

8 SWOT Analysis means to consider 1

(a) Strengths
(b) Weaknesses
(c) Opportunities and
(d) Tenure of Business.

TRUE/FALSE
Ans

9 Marketing Plan is a document : 1

(a) regarding the marketing objectives, strategies and activities to be followed by the new
Enterprise.
(b) which describes the flow of goods/services from production point to the customers.
(c) which determines how many units must be sold or how much sales volume must be
achieved in order to have break-even-point.
(d) which reflects the projected cash available with the Enterprise.
Ans

10 Sanjana graduated from National Institute of Fashion Studies and wants to start her own 2
boutique. She wants to understand the feasibility and viability of the proposed venture.
This will also facilitate her in assessing and making provisions for the bottlenecks in the
progress and implementation of the idea. She also wants to know about the success of the
project along with the risk factors involved. Identify and give the meaning of the
document which is required by Sanjana on the basis of the above para.
Ans

11 Mahesh, an entrepreneur is planning to enter into a new business of manufacturing laptop 2

bags with an inbuilt lock facility. Being highly complex and tedious, its manufacturing
operations need to be well planned. He decides that the complete bag will be
manufactured at his own factory i.e. no part of its manufacturing process will be
outsourced. Identify the important component of business plan that is discussed above.
Also, state what needs to be described in the above stated manufacturing situation.
Ans

12 Explain proforma investment decisions and proforma financing decisions as components 3

of a financial plan.

13 While preparing an operational plan, an entrepreneur has to pay attention towards 6

various elements. Explain these elements.
Ans

2022
14
Ans

2023

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15 From the following, identify the form of business organisation that generally has a limited 1
area of operation due to limited finance availability and limited managerial abilities:
(a) Sole Proprietorship
(b) Partnership Firm
(c) Private Company
(d) Public Company
Ans

16 Give the meaning of Implied authority and mutual agency as characteristics of a 2

partnership form of business organisation.
Ans

17 State any two characteristics of partnership which overcome the inherent limitations of 2
sole proprietorship form of business organisation.
Ans

18 Preparing a good business plan can’t guarantee success but it can go a long way towards 2
reducing the odds of failure. Justify this statement by giving any two points.
Ans

19 Kartik works as a production analyst at Shree Tyres . During the board meeting for the 3
financial year 2022 23, the target production of tyres for the year was decided at 6 lakh
units. The Managing Director of the company asked Kartik to prepare a blueprint in
advance and work your plan . He also added that this blueprint will ensure orderly flow
of materials in the manufacturing process from the beginning to the end.
Identify and explain the components of business plan being discussed by the Managing
Director.
Ans

20 The Covid-19 pandemic has ushered an era of new business opportunities for many 5
businesses. Rajat, an entrepreneur, designed a unique N-95 face mask which would not
only filter the air inhaled but also change its colour when the mask is no longer good for
use. Not only this, it would also send an alert in case the user of the mask comes in contact
with any virus in the air. The idea sounds good and marketable, but Rajat needs to
impress the investors to fund his idea. Rajat prepared a three-minute summary of the
business plan executive summary to awaken the interest of the potential funders,
customers or strategic partners.
(a)Give the meaning of business plan and identify the format of business plan used by
Rajat.
(b) Explain three formats of business plan other than the one identified in (a) above.
Ans

COMPARTMENT 2019

21 Why is ‘follow-up’ regarded as an important element of operational plan? 2

Ans

22 Why is it said that operational plan ensures ‘work your plan’? 2

Ans

23 Suman joined a catering college after finishing her schooling. She specialised in baking 3
cakes. After finishing her course, she along with her two friends started a bakery shop in
Lucknow. Her shop was an instant success as the cakes were produced with high quality
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 ingredients. In the month of November, Suman’s sister’s birthday approached and her
mother requested her to bake a cake for the birthday. Suman baked a cake for her sister at
their home for her sister’s birthday. Identify and state the nature of activity performed by
Suman for her sister and at her shop.
Ans

24 State the rules for goal setting. 3

Ans

25 In addition to the benefits to going public, i.e. bringing public issue to generate funds for 3
the organization, there are many additional obligations and reporting requirements. State
any six such obligations and requirements for an organisation.
Ans

26 ‘‘A company is an artificial person with separate legal entity and common seal but with a 4
limited scope of action.’’ Explain.
Ans

27 Arvind Mallu, a brass artesian from Moradabad had a stall in the ‘Trade Fair’ showcasing 6
his range of products made of brass. He manufactures and sells from saree pins to big
flower-vases and lamp-shades. He got good response from the public and even enquires
from foreign businessmen. He wants to switch from an unorganized unit to a well-
planned unit which would be called ‘Peetalkari’. For this he needs to know the feasibility
of the enterprise and the potential financial commitments for the new venture. He
approached Dena Bank for financial assistance. The manager asked him for two
documents.
I. A comprehensive document that describes the external and internal elements involved
in starting his enterprise.
II. A sub-part of the above document that will satisfy the following queries of the
manager:

(i) How will the funds of the enterprise be invested in different assets ?
(ii) Apart from bank loan, what are the other sources of finance that Arvind Mallu would
use ?
(iii) What is the projected profit for the new unit ?
(iv) How will Arvind Mallu determine the volume of sale required to cover the total
variable and fixed expenses of his unit ? Arvind Mallu had to draft the two documents
clearly stating the answers for the query raised.

(a) By what name is the comprehensive document known as ?

(b) Which sub-part of the comprehensive document is to be prepared by Arvind Mallu ?
(c) Identify and explain the different components of the sub-part that Arvind Mallu is
required to write in his comprehensive statement to satisfy the queries of the manager.
Ans

COMPARTMENT 2020
28 Ramesh is working as a salesman in a company engaged in the marketing of readymade 1
garments. He gets a monthly salary of 50,000 besides many other benefits. He is doing
this work to earn his living and satisfy the materialiastic and social requirements. He is
not doing this work out of love, care and affection. Ramesh has undertaken ____________
activity.
Ans

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29 Monica and Monisha are working in an organisation that manufactures industrial 1
machines. One day during the lunch time, they were discussing about the form of the
organisation in which they were working. Monica described to Monisha the form of her
organisation as one which has an independent status, different from its members. She
added that her organisation cannot be held liable for the actions of its members. Monisha
further added that the organisation is created by law and could be liquidated by law only.
Monica and Monisha are discussing about ___________ form of organisation.
Ans

30 A comprehensively written document prepared by an entrepreneur formally describing 1

all the relevant external and internal elements, involved in starting a new venture is called
__________.
Ans

31 Mutual agency as a characteristic of partnership states that each partner in liable for the 1
acts performed by the other partners.
TRUE/FALSE
Ans

32 TAN is a : 1
(A) 10-digit Alpha number
(B) 5-digit numeric number
(C) 10-digit Alphanumeric number
(D) 10-digit numeric number
Ans

33 The maximum number of members in a private company can be 1

(A) 50
(B) 100
(C) 200
(D) No limit
Ans

34 State any two points of importance of ‘goal setting’. 2

Ans

35 Mohan Singh wants to start a dairy products business in his village in Gurdaspur district 2
of Punjab. One day he was discussing this with his friend Makhan Singh. Makhan Singh
told him that to start a business, first, he should prepare a good business plan so that he
may not face any problem in the future. Mohan Singh requested him to explain the
importance of a business plan. State any two points of importance that Makhan Singh
might have explained to Mohan Singh.
Ans

36 Tony is carrying on a wholesale business of selling fruits and vegetables. His shop is in a 2
local wholesale market. His turnover in the previous year was < 6 lakh. As per rules, he
has to quote a ten digit alphanumeric number in all his business transactions. This number
enables linking all transactions of the ‘‘person’’ with the department which issues this
number. Identify the number and state any two ‘‘persons’’ who must have this number.
Ans

37 Hemant, after completing his B-Tech from IIT Guwahati, decided to set up an enterprise 3
to manufacture microchips as he had the required knowledge and expertise for the same.
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 To determine the viability of the venture, he decided to prepare a business plan. He
prepared an introductory profile and wrote the mission statement describing the size,
scope, and nature of the enterprise. What else needs to be mentioned in the second
component of the business plan? State any six.
Ans

38 Explain any six characteristics of a sole proprietor. 3

Ans

39 Explain any six essential characteristics of business. 6

Ans

40 Explain any four components of a financial plan. 6

Ans
COMPARTMENT 2022

COMPARTMENT 2023
41 Assertion (A): Minors cannot form a partnership firm. 1
Reason (R): Minors are incompetent to enter into a valid contract. Choose the best option
from the following:

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

42 Riya was fond of cooking and wanted to use her skills to establish a business of 1
homemade pickles. Her business was established and it turned out to be a very popular in
and around her locality. Her husband was a manager in a bank and was transferred to
another city. Riya had to go along with her husband, so she had to close down her
flourishing pickle business. The form of business organisation operated by Riya was:
(a) Partnership
(b) Public Company
(c) Sole Proprietorship
(d) Private Company
Ans

43 Which of the following statements is not true about a Private Company? 1

(a) A private company has a minimum of two
(2) and maximum of fifty (50) members.
(b) A private company does not restrict the right of transfer of shares of the members.
(c) As per Pvt. Ltd.
(d) A private company prohibits the public to subscribe for its shares or debentures.
Ans

44 State any four parameters that suggest that an entrepreneur should choose company form 2
of organisation.
Ans

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45 An entrepreneur must pay adequate and proper attention to human resource planning as 2
it helps in assessing the kind of people required. Explain
Ans

46 Explain ‘identify the target market’ as a step in preparing the marketing plan. 2
Ans

47 Nandini did her post-graduation from Manipur University, Imphal. She had good job 3
offers from several metropolitan cities but she thought of doing some creative work in
Imphal. She observed that a special type of chilli was grown by the farmers of most of the
villages around Imphal. This chilli has a distinct flavour and the pickle made from it also
had a peculiar taste, but the local farmers were neither trained in farming of this kind of
chilli on a large scale nor was there a secured market for their produce. Nandini shared
this with her friends Dorjee and Shizu. Dorjee was an MBA in marketing and Shizu had
done a basic course in food production and preservation. Nandani, Dorjee and Shizu
formed an organisation for doing the business of pickle manufacturing using these
chillies. Each of them contributed < 2 lakh towards the capital and decided to share the
profits equally. They also agreed that any of them can act on behalf of all of them. Each
one of them will be the principal as well as the agent of each other.
(a) Identify the type of business organisation started by Nandini, Dorjee and Shizu.
(b) Quoting the lines, state the two features of the type of business organisation identified
in part (a) above.
Ans

48 Give the meaning of a Business Plan. Explain the formats in which a business plan can be 5
presented.
Ans

49 Aman started his business of manufacturing designer home decor items in Mumbai. His 5
business was growing because of the quality products he offered. He thought of
expanding it to other cities of Maharashtra and for this he required more financial and
human resources. Aman approached his Chartered Accountant, Rohan, for advice on his
future course of action. Rohan suggested to Aman to go for company form of organisation
where he could start even with two members, and have a minimum paid up capital of
one lakh. Acting on the advice of Rohan, Aman formed a company with one of his friends.
(a) Identify the type of company formed by Aman and his friend.
(b) State any four privileges enjoyed by the type of company identified in (a) above.
Ans
SAMPLE QP-2014-15

50 Differentiate between a private company and a public company on the basis of minimum 1
and maximum number of members required?
Ans

51 What is ‘Value Added Tax’(VAT)? 1

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52 Give the meaning of ‘routing’ and ‘scheduling’ as elements of operational plan. 2

Ans

53 Sandeep had started his business of dairy products in 2013. He wanted to expand his 2
business but did not have the necessary funds. One of his friends suggested that he should
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 approach Mr. Goel, a venture capitalist for further funds. When Sandeep approached
Mr.Goel, he was given three minutes for explaining his business proposition. Identify and
explain the format of business plan referred in the above para.
Ans

54 Vikram, a new generation high tech farmer is involved in organic farming. He realized 2
that there was a huge market for his fruits and vegetables as people have become diet
conscious and prefer to eat healthy food. Keeping this in mind, he decided to open ‘Salad
bars and organic fruit juice corners’ in prominent malls in Delhi. Now he needed a ‘road
map’ for himself to start the venture.
(a) Identify the term used for ‘road map’ by Vikram
(b) Why this road map is required?
Ans

55 Deepika wanted to pitch in to reduce the financial crisis prevailing in her house and 3
thought of working as a cook. She started working in three different households, one
Punjabi, One Gujrati and one South Indian family. She soon realized that all the three
households had different cuisine. It was indeed a challenge for her to learn the techniques
of the cuisine. All the families greatly appreciated the timeframe within which she had
mastered the local cuisine. After working for them for a year, she decides to open a small
eating joint of her own along with two of her friends by the name ‘Apna Bhoj’. They
decided to share profits equally and that each of them will be liable for acts performed by
the other two. Soon the eatery became a hot spot because of the fusion platter which was
being offered.
(a) Identify the kind of business organisation which was set up by Deepika and her
friends.
(b) Quoting the lines from the paragraph, state the features of this form of business
organization.
Ans

56 State the three rules for goal setting. 3

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SAMPLE QP-2015-16

57 What is meant by ‘mutual agency of partners? 1

Ans

58 Although not mandatory, some entrepreneurs may file part I of entrepreneur’s 1

memorandum District Industries Centre. Why?
Ans

59 "Human life is built around works". Identify the form of Business Organisation being 2
talked about in the following sentences: -
(a)"The one-man control is the best in the world if that man is big enough to manage
everything."
(b)"Two heads being better than one."
(c)"Self-help as well as mutual help system."
(d)The birth of this legal person is by law and can be put to death by law only.(0.5*4=2)
Ans

60 Chacko Ltd. has been manufacturing umbrellas since 1980. They are the market leaders in 2
manufacturing small hand size umbrellas. They have their production unit in Kochi. The

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 MD’s son- Abraham Chacko took over the family business in 2010. He had finished
graduation from USA. Using his educational and networking skills , he was able to take
up an export order. He also decided to operate an exclusive export oriented unit in
Chellanam. The production work for this unit began in 2014. A dedicated team framed an
operational plan for the entire process. Abraham visited the plan to evaluate and take
appraisal of the work performed in the unit. State two ways as to how it will help
Abraham.
Ans

61 Explain the following features of a cooperative society: Democratic management Capital 3

and return thereon Distribution of surplus
Ans

SAMPLE QP-2016-17

62 What is meant by ‘private sector enterprise’? 1

Ans

63 Sanjiv was developing a business plan for his organization. While working on the 2
financial plan he realised that his financial requirements will be for fixed assets and their
installations, preliminary expenses, working capital, expenses on research and
development and investment in short-term assets viz. raw material, level of cash, etc. To
decide on the sources of funds for the venture, he tried to ensure the selection of the best
overall mix of financing for the enterprise.
a. Identify the elements of financial plan discussed here.
b. Why is it important for an entrepreneur to ensure the selection of the best overall mix of
financing for the enterprise?
Ans

64 Deepak and Gaurav joined the prestigious law university in Ahmedabad in the year 2010. 3
During the course of study they became good friends and they both realized that their
common interest lies in the field of corporate law. After completion of their degree they
decided to start a firm of their own, namely ‘Corpo Law Firm’ wherein both of them will
be co-owners dividing the profit and loss. After successfully running the firm for a year,
they realized that there are certain rights which are denied to their firm as it is not
registered. Explain the consequences of non-registration of their firm.
Ans

65 Explain any three characteristics of a company. 3

Ans

66 Kapish an unemployed graduate got training for automobile repairing and allied services 4
under PMKVY (Pradhan Mantri Kaushal Vikas Yojana) for skill development. He is
planning to start a digital workshop for which he needs 25 lacs. Though through MUDRA
(Micro Units Development and Refinance Agency) he is able to get a loan of 10 lacs but
still he is falling short of 15 lacs. He wants to pitch in his idea to potential investors
through his business plan. Explain the different formats in which he can present his
business plan for his start-up.
Ans

SAMPLE QP-2017-18

67 Give the meaning of a ‘Joint Hindu Family Business’. 1

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Ans

68 Mohan and Radha want to start a shop to sell Rajasthani Sweets. They did not know how 2
to enter into the agreement. Therefore, they approached a Chartered Accountant who
advised them to prepare a document which may stipulate the terms and consolidation of
the agreement. Name the document about which the chartered accountant advised Mohan
and Radha. Also state any four important items they should include in the agreement
besides the name, nature and place of business.
Ans

69 Gopi, in order to promote local craftsmen of Gujarat, formed an organization where in the 3
persons voluntarily associate themselves to promote common economic interest. The basic
purpose of this organization was to help these craftsmen to find market for their products.
It had a managing committee that was elected on the basis of ‘one member one vote’. a.
Identify the form of business organization set up by Gopi. b. Quoting the lines form the
above para, state any two features of this form of organization.
Ans

70 What will be the effect on Production Plan in the following situations: a. When there is no 3
manufacturing b. When there is partial manufacturing c. When there is complete
manufacturing
Ans

71 Kumar has completed his senior secondary examination from Central Board of Secondary 6
Education. After the report had been declared his father asked him what he would like to
do in the future. Kumar was undecided and did not answer. His father adviced him to
start his own business and to pursue his studies through distance learning mode. Kumar
reluctantly agreed. He entered into a partnership agreement with one of his school
friends, Gurmeet. They decide to start a business of cold drinks with traditional mughlai
aroma in a fashionable crowded street of Bengaluru. Kumar and Gurmeet each invested
Rs.10,00,000 as their respective capitals. They wanted to earn good profits. As they were
new to the business they did not finalise deadlines for different activities as well as the
quantity of different types of drinks aroma wise. Because of the novelty of their product
their sales increased on daily basis. Ultimately a stage arose when they required to expand
their business. For this they did not take any timely action. Gurmeet advised to open
another branch in a remote area without looking at the relevance of the place regarding
the approach to the branch. Kumar was undecided. They approached Kumar’s father for
advice. He advised them that their activities ought to be specific, measurable, attainable,
relevant and time based.
(a) Identify the concept about which Kumar’s father advised them
(b) State the importance of the concept identified in (a) above
(c) Also state the three rules that may be followed in the implementation of the concept.
Ans

SAMPLE QP-2018-19

72 Why is SWOT analysis important in preparing the marketing plan? 2

Ans

73 Subeer, a tech-entrepreneur and his friend Harish, an investment banker planned to start a 3
business organization where they can exercise control over the business, manage it with
limited liability and that its continuity is not affected by entry or exit of members. They

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 intend to maintain the confidentiality of the business operations as well. Identify the form
of business organization best suited for them giving reasons for the choice?
Ans

74 “Writing a good business plan can’t guarantee success, but it can go a long way towards 4
reducing the odds of failure”. Elucidate the importance of a business plan in this context.
Ans

75 There is no fixed format for business plan presentation. It varies according to the 4
entrepreneur’s goals and audience, especially for start-ups there are four formats that are
followed for business plan presentation. Comment.
Ans

76 Latha started her business of making dosa batter from her home during her free time and 6
started selling the same to households in her area. The batter was a huge success as the
quality was good and according to the taste of the target market. She decided to make it
into a full time business. Her entire family supported the venture. She approached few
family members and friends who lent her around Rs.2 lakh. With that money she
purchased some machinery and took a small space on rent to start producing the ba tter.
Her batter in the name of ‘Home Taste’ was a huge hit in the market. Within a span of few
years her business grew double fold. She was talking about her successful venture to her
brother who is also a chartered accountant. He suggested her that she should improve her
business model so that it will enable mass production. They analysed that they will have
to make a list of all pros and cons of increasing the business. Keeping this in mind, her
brother prepared a document which described formally the relevant external and internal
elements involved in starting the venture on a large scale. This document comprised of
various components. Explain in detail any six items which should be included in the
component which gives a projection about the economic feasibility of the enterprise.
Ans

77 Gauri started her business of manufacturing designer furniture in Lonavala. Her business 6
was a huge success and she thought of starting a designer studio involving huge capital in
Mumbai as well as in Pune. Her friends wanted to join hands with her and open the same.
They approached a chartered accountant and he suggested them to form a private
company as according to him this form of company is more desirable.
a. State any six privileges of a private company that make it a more desirable than a public
company.
b. Why a company is called ‘an artificial person having perpetual succession and a
common seal’?
Ans

SAMPLE QP-2019-20

78 Why are copyrights and patent important for an entrepreneur? 2

Ans Copyright: It gives the creator of original work exclusive rights to it, usually for a limited
time. It means apply to a wide range of creative, intellectual or artistic forms or work. For
example, musical composition, literary work such as poems, plays etc.
Patents: It grants an inventor the right to exclude others from making, using, selling,
offering to sell, and importing an invention for a limited period of time, in exchange for
the public disclosure of the invention.

79 Differentiate between the two types of sales strategy. 2

Ans The two strategies are:

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 Direct sales strategy- the sales people talk about each feature of the competitor’s product
and compare it to theirs.
Indirect sales strategy- in this the approach is by demonstrating features and benefits not
available with the competition’s products or services without ever mentioning them by
name.

80 Vishnu started his factory for manufacturing plastic items in Daman. As per the advise of 2
his Manager, he appointed ‘Bizmadeeasy’ company to formulate a business plan for his
manufacturing unit. The company in it’s business plan mentioned the cost of installing a
water waste treatment plant within the premises of the manufacturing unit. Interpret any
two socio-economic benefits expected to acquire from the proposed investment.
Ans The socio-economic benefits are:
1) Employment generation
2) Import substitution
3) Ancillarisation
4) Export promotion
5) Local resource utilization
6) Development of the area (Any two)

81 Karan finished his graduation from Polytechnic college in the year 2018. He had 3
specialised in repairing of electronic goods. After few months of his graduation, he met
his uncle who has a small factory manufacturing electronic circuits used in Television. His
uncle informed Karan that he could no longer run the unit so Karan decided to take over
the factory. His uncle had two workers. Karan was able to get a huge order of supplying
10,000 units of electronic circuits every month from a popular TV manufacturing company
in India. He knew that to meet the orders timely he has to employ more people. In order
to do so he decided to formulate Manpower planning. Describe the factors that Karan has
to keep in mind while formulating manpower plan.
Ans Karan has to formulate manpower planning keeping in mind the following:
a) What kind of people are required? To carry on its work, each organisation needs
personnel with the necessary qualifications, skills, knowledge, experience and aptitude for
work. Since it is a factory, Karan will need more semi skilled employees keeping in mind
that they will be manufacturing electronic circuits. He will also need a manager to
supervise the production work.
b) How many people are required? This question deals with the quantity of personnel the
enterprise needs. Presently the factory has just two employees, so Karan will need at least
ten workers to achieve the production target every month. This number of employees will
be taken into account keeping in mind the absenteeism and turnover.
c) How to procure personnel? As the next step in manpower planning, entrepreneur
clearly mentions the strategies, methods, policies, rules and regulations pertaining to
employees. He can approach his own polytechnic college and recruit fresh graduates. He
has to properly train the employees so that there is less error in production and the target
is completed on time.

82 An organisation will have to look into three situations while framing the production plan. 3
Explain these three situations.
Ans The three situations involved in production plan are:
a. No manufacturing involved: If the new venture does not include any manufacturing
function, say it’s a trading firm or a service provider, then this section will stand
eliminated from the plan.

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 b. Partial manufacturing: If some or all the manufacturing process is to be subcontracted
or outsourced, then the production plan should describe:
i) Name and location of subcontractor(s)
ii) Reasons for their selection
iii) Cost and time involved
iv) Any contracts that have been completed etc. In such cases, a clear mention of what
entrepreneur intends to do himself and what he plans to get it done from outside is
required.
c. Complete Manufacturing: If the manufacturing is to be carried out in whole by the
entrepreneur, he/she will need to describe:
i) the physical plant layout,
ii) the machinery and equipment required to perform the manufacturing operations,
iii) raw materials and suppliers names, addresses, terms and conditions,
iv) cost of manufacturing
v) any future capital equipment required etc.

83 Explain the various steps involved in preparing a marketing plan? 6

Ans Marketing plan provides the organisation with guidelines with respect to marketing
objectives, strategies and activities to be followed. The various steps are:
a. Business situation analysis: If it is an existing enterprise then it’s past performance and
achievements are looked into it. If it is a new enterprise then aspects like personal profile
of the entrepreneur, product development, experience of the entrepreneur, the need the
product satisfies and marketing segmentation is looked into.
b. Identify the target market: For any new venture, it is very essential to define clearly the
specific group of potential customers whose needs the enterprise aims to fulfil.
c. Conduct SWOT analysis: The plan needs to consider the Strengths, Weakness,
Opportunities and Threats of the organisation to ensure success.
d. Establish goals: The enterprise needs to set realistic, attainable goals. They need to
quantify the goals so that they can be controlled and limit it to certain number.
e. Define marketing strategy: The strategy should comprise various decisions pertaining
to the following P’s: Product, Price, Promotion and Place
f. Implementation and monitoring of the plan: It is important for the entrepreneur to
understand that this plan should be flexible and he should be prepared to make necessary
adjustments as and when required.

84 Explain are the various elements of an Operational plan? 6

Ans a. Routing: Routing is a process concerned with determining exact route or path a
product/ service has to follow right from raw material till its transformation into finished
product.
b. Scheduling: It means fixation of time, day, date when each operation is to be
commenced and completed. It is the determination of the time that should be required to
perform each operation.
c. Dispatching: The process of initiating production in accordance with pre-conceived
production plan is said to be dispatching. This includes issuing necessary orders
instructions, guidelines and/or information to work pertaining to giving practical shape
to the production plan.
d. Follow-Up: This element relates to evaluation and appraisal of work performed. A
properly planned follow-up procedure is helpful in dispatching errors and defects in the
work. Follow-up element helps the entrepreneurs in:
a) Developing ways to review the present situation with regard to materials, work-in-
progress and finished goods.
b) Evolving ways to expedite the performance of those departments which lag behind.
c) Removing obstacles in the way of production by suggesting remedial measures.

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 e. Inspection: Inspection is the art of comparing materials, product or performance with
established standards. This element helps the entrepreneur to set up laboratories or evolve
strategies/methods to ensure predetermined quality of product/service.
f. Shipping: This element is a detailed presentation by the entrepreneur explaining the
chronological steps in completing a business transaction efficiently and profitably.

SAMPLE QP-2020-21

85 Varun along with his friends had a brilliant idea to manufacture an air conditioner which 1
will also act as an air purifier. The idea was new and the market did not have such a
successful product. For starting the unit, they were in need of huge funds, so they decided
to approach Shankar, a successful businessman and who is also a venture capitalist.
However, Shankar said that he was very busy and if they could pitch their idea within a
span of 3 minutes, he was ready to hear it. Which format of Business plan will Varun and
his friends would have to use?
A. Elevator Pitch
B. A pitch deck with oral narrative
C. A written presentation for external stakeholders
D. An internal operational plan
Ans A. Elevator Pitch

86 Ab ltd. was into manufacturing security cameras for household and commercial 1
buildings. Their Research and development team came up with a new idea of
manufacturing drones as security cameras which will give a 360-degree view of the entire
building. They needed huge finance for the same. The company MD Sharath heard of this
group of venture capitalists who are ready to invest in new ideas. He seeked an
appointment with them and started preparation of a business plan to be presented before
them. His plan was to make an informative power point presentation showing key graphs
of financial trends. It was meant to trigger discussion among the members. Which format
of business plan is Sharath using?
A. Elevator Pitch
B. A pitch deck with oral narrative
C. A written presentation for external stakeholders
D. An internal operational plan
Ans B. A pitch deck with oral narrative

87 Vinita, Bhavana, Rani and Nandini are all good friends in the age group of 15 -17 years of 1
age. All of them decided together to start a business venture of making soaps at home
using natural ingredients. They decided to name their venture as ‘O&HM’ meaning
Organic and Home Made. They spoke about their venture to their parents and asked them
if their business could be registered so that it will be easy to divide the profits. Vinita
suggested that they should register it as a Partnership firm. Can they form a partnership
firm?
A. No, they cannot form a partnership firm since all of them are minors
B. Yes, they can form a partnership firm
C. No, since minimum number of people required to form a partnership is 10
D. None of the above
Ans A. No, they cannot form a partnership firm since all of them are minors

88 Enlist two points as to why a private company is more desirable than a public company. 2
Ans A substantial number of entrepreneurs prefer to form a private company because of the
following important privileges:
1) Only two members are required to form a private company.

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 2) Only two directors are required to constitute the quorum to validate the proceedings of
the meetings.
3) Such a company is not required to file a prospectus or a statement in lieu of prospectus
with the Registrar of Companies.
4) It can commence its business immediately after incorporation.
5) Holding of a statutory meeting or filing of a statutory report is required by a private
company.
6) A non-member cannot inspect the copies of the profit and loss A/c filed with the
Registrar.
7) Limit on payment of maximum managerial remuneration does not apply to a private
company.
8) Restrictions on appointment and reappointment of managing director do not apply.
9) Maintaining an index of members is not required by a private company.
10) Directors of the private company need not have qualification shares. (Any two points)

89 Give reasons for the following situations in business 2

1. Operating cycle is shorter in trading business than in manufacturing business.
2. Shelf life has an impact on the inventory.
Ans 1.If one is involved in manufacturing activity, one starts with buying raw materials and
packing materials etc. These materials are then converted into the end product. During the
time required to convert raw material to the end product, various expenses like wages,
rent, salary, utility bill, insurance etc are to be paid. Once the end product is ready, it has
to be sold and money received from the customer.
2.Items like vegetables, fruits, flowers and fish are perishable in nature. This calls for
special storage conditions and equipment – cold storage, freezers etc. These have financial
implications. Similarly, some of the manufactured food or medicinal products have expiry
dates – beyond which they are not fit for consumption. This imposes certain constraints on
inventory management.

90 Source based question Source - Entrepreneur magazine - August, 2020 ‘ 2

A recent survey conducted jointly by FICCI and Indian Angel Network revealed that 70
percent of startups across the country have been impacted by COVID-19 while as many as
12 per cent have had to halt operations altogether. These are difficult times that n o one
was prepared to deal with. The prolonged lockdown had a massive impact on the startup
ecosystem. Given that they rely largely on a constant flow of capital and investments,
which due to the pandemic came to a complete standstill. With the ongoing crisis, to keep
startups afloat has become quite a challenge. However, this challenge can be eliminated if
entrepreneurs adapt to the current times, adopt new strategies, and are open to
experiments and pivot their business plans. That’s because the pandemic has not only
affected our present but also our future.’ Keeping in mind this article, state any two things
which should be written by startup companies in their manpower planning component of
business plan?
Ans Manpower planning helps in assessing:
a. what kind of people are required- Every organisation needs the right person with the
right qualifications, skills, experience and aptitude to work. So, the organisation should be
clear to know as to what kind of personnel is required as per the nature of business
activity
b. How many people are required- They should also estimate the number of personnel
required keeping in mind the total work and survival in the present situation and
planning for future growth.
c. How to procure personnel - The next step is to recruit, select and train the right
personnel. (Any two points)
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91 You are Ravi and you have planned to start manufacturing a new brand of chocolates 3
aiming at teenagers. Your company ‘Delight’ has already been manufacturing and selling
biscuits since 2010. The success of biscuits has encouraged you to move ahead into the
chocolate industry. Keeping in mind the steps involved in preparation of the marketing
plan draft a marketing plan explaining the first three steps.
Ans Steps involved in marketing plan are:
1) Business situation analysis: 'Where we have been?' – is the question responded to as
the first step in designing the marketing plan. I have completed my MBA from a reputed
institute in India. I have experience in this field for 10 years and I have been quite
successful and completely understand the needs of the customers.
2) Identify the target market: For a new venture, it's very essential to define clearly the
specific group of potential customers whose needs the enterprise aims to fulfill. The target
market in this case are teenagers.
3) Conduct SWOT analysis: It is important for the entrepreneur to consider in the 'target
market' his/her enterprise's:
a) Strengths
b) Weaknesses
c) Threats
d) Opportunities

Strengths: I am already in the field of fastmoving consumer goods which gives me

knowledge about various aspects
Weakness: I might not be able to concoct the right combination to satisfy the needs of the
customer.
Threats: There is lot of competition already in the market
Opportunities: There is market for chocolates in the country

92 Explain any three characteristics of partnership. 3

Ans Characteristics of partnership:
1) Two or more persons: Partnership is the outcome of a contract. Thus: a) There must be
at least 2 persons to enter into contract to form partnership. b) Minors cannot form a
partnership firm as they are incompetent to enter into contract but can be admitted to the
benefits of a running firm. c) If these people intend to do banking business, the maximum
number can be ten otherwise twenty for the other business.
2) Agreement: The relation of partnership arises from contract and not from status.
Though oral agreement is even acceptable but in practice written agreement is much more
advisable as disputes can be resolved better with it.
3) Profit sharing: The objective of the business is to make profits and distribute the same
amongst partners. Any association initiated to do charity work is not partnership.
4) Unlimited liability: Mostly, the liability of the partners of a firm is unlimited. Their
personal properties can be disposed off to pay the debts of the firm if required. The
creditors can claim their dues from any one of the partner or from all of them, meaning
partners are liable: Individually and Collectively
5) Implied authority: There is an implied authority that any partner can act on behalf of
the firm. The firm stands bound by the acts of partners.
6) Mutual agency: The business of partnership can be carried on by all the partners or any
one of them acting for all. Thus, every partner is principal as well as agent of other
partners and of the firm. Thus, (i) Each partner is liable for acts performed by other
partners, (ii) Each partner can bind other partners and the firm by his acts done in the
ordinary course of business.
7) Utmost good faith: Every partner is supposed to act honestly and give proper accounts
to other partners. Thus, mutual faith and confidence in one another is the main strength of
partnership.
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 8) Restriction on transfer of shares: No partner can sell or transfer his share to anybody
else without the consent of the other partners. By giving a notice for dissolution of the
firm, a partner can show intention to discontinue as partner.
9) Continuity: A partnership continues up to the time that all partners desire to continue
it. Legally, a firm dissolve on the retirement, death, bankruptcy lunacy, or disability of a
partner if not otherwise provided for in the partnership deed.

93 Explain any three characteristics of sole proprietorship. 3

Ans 1)Individual ownership: This business is exclusively owned by a single person.
2) Individual management and control: All affairs are managed and controlled by the
sole proprietor.
3) Individual financing: All investment is made by the proprietor. Though, if required
he/she has access to loans and debts to procure funds for business.
4) No separate legal entity: Legally, the proprietor and proprietorship are one and the
same business and owner exists together, thus with owner's death, business too dies.
5) Unlimited liability: The proprietor is liable/responsible for all losses arising from
business. In case the business assets are insufficient to pay off liabilities, his/her personal
property can be called upon to pay his business debts.
6) Sole beneficiary: The sole proprietor alone is entitled to all the profits and losses of
business. So, he puts his heart and soul to increase his profits.
7) Easy formation and closure: Sole proprietorship are subjected to minimum legal
formalities and regulations both at time of commencing and/or closing.
8) Limited area of operation: This form of business generally has a limited area of
operation due to: limited finance availability limited managerial abilities (Any three
points)

94 AB Ltd., manufacturing light bulbs decided to start manufacturing of ceiling fans. They 4
formed a sister concern by the name ‘Cool Air Ltd’. The new company was in need of
some investment and for the same they had approached a bank. They had submitted a
business plan to the bank stating all the necessary details. They had mentioned very
clearly in the plan that they will be manufacturing the blades and have decided to
outsource the required motor parts. The plan spoke about the reason for outsourcing
along with the contracts with subcontractors.
a. Explain the Component of the business plan along with its related sub part
b. The business plan further gave details about the money which will be invested by the
owners and how much they are expecting to borrow. Explain the component of the
business plan along with its related sub part.
Ans a. Production plan, partial manufacturing Production, the most important activity of an
enterprise, because it is here that transformation of raw material into finished product
takes place with the help of energy, capital, manpower and machinery. Partial
manufacturing: If some or all the manufacturing process is to be subcontracted or
outsourced, then the production plan should describe:
i) Name and location of subcontractor(s)
ii) Reasons for their selection
iii) Cost and time involved
iv) Any contracts that have been completed etc. In such cases, a clear mention of what the
entrepreneur intends to do himself and what he plans to get it done from outside is
required. b. Financial plan, proforma financing decision Financial plan is a proj ection of
key financial data about:
a) The potential investment commitment needed for the new venture, and
b) Economic feasibility of the enterprise Proforma financing decisions: This section
summarizes all the projected sources of funds available to the venture to raise finance
from, which you have already studied in previous class.
Typically, sources of funds are:
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 i) owners i.e. Owner's funds
ii) outsiders i.e. Borrowed funds.

The entrepreneur's job is to ensure the selection of the best overall mix of financing for the
enterprise so that:
a) the cost of capital and the financial risk stands minimized,
b) return on investment and profitability stands maximized.

95 This document is valuable to the entrepreneur, potential investors, venture capitalists, 4

banks, financial institutions, new personnel's suppliers, customers, advisors and others
who are trying to familiarize themselves with the business venture, its goals, and
objectives. State any four reasons for the importance of this document.
Ans Importance of business plan:
1) It helps in determining the viability of the venture in a designated market
2) It helps in providing guidance to the entrepreneur in organizing his/or her planning
activities as such: i) identifying the resources required ii) enabling obtaining of licenses if
required etc. iii) working out with legal requirements as desired by the government.
3) It helps in satisfying the concerns, queries, and issues of each group of people interested
in the venture.
4) It provides room for self-assessment and self-evaluation, requiring entrepreneur to
think through various scenarios and plan ways to avoid obstacles.
5) It helps to realize the obstacles which cannot be avoided or overcome.
6) As the investors/lenders focus on the four Cs of credit: character, cash flow, collateral
and equity contribution, it is the business plan which reflects the entrepreneur's credit
history, the ability to meet debt and interest payments, and the amount of personal equity
invested thus serving as an important tool in funds procurement.

96 Explain any six characteristics of company 6

Ans Characteristics of a Company:
1) Voluntary association: A single person cannot constitute a company. At least two
persons, voluntarily, must join hands to form a private company, while a minimum of
seven persons are required for a public company.
2) Artificial person: A company is created by law. Though it has no body, no conscience
still it exists as a person, having a distinct personality of its own.
3) Separate legal entity: A company has an independent status, different from its
members.
4) Common seal: Being an artificial person, a company cannot sign the documents. Hence,
it uses a common seal on which its name is engraved.
5) Limited liability: The liability of the shareholders of a company is normally limited to
the number of shares held or guarantee given by them.
6) Transferability of shares: No shareholder is forever wedded to the company. Subject to
certain conditions, the shares are freely transferable. The private companies do impose
some restrictions on the transfer of shares.
7) Diffusion of ownership and management: In this form of organisation, entrepreneur
should clearly understand there exists separation of ownership from management.
8) Number of members: In case of a private company: – Minimum members required are:
Two Maximum members: Fifty (excluding employees) And for a public company:–
Minimum requirement is : Seven Maximum number : No Limit
9) Limitation of action: The scope of this artificial person is determined by: a) The Indian
Companies Act b) Memorandum of Association c) Articles of Association
10) Winding up: The mode of incorporation and termination (winding up) is both as per
the Companies Act only. It's born out of law and can be liquidated only by law. (Any six
characteristics)

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 SAMPLE QP-2021-22-TERM 1

97 "One-man control is best in the world if that man is big enough to manage everything." 1
This statement holds true for ____________ form of business organization.
a. Private company
b. Sole proprietor
c. Partnership
d. Public company
Ans b. Sole proprietor

98 Partnership form of organisation was developed due to the inherent limitations of sole
proprietorship. One of them is limited capital, identify the other two?
a. Limited managerial ability, limited continuity
b. Limited continuity, unlimited liability
c. Limited managerial ability, unlimited liability
d. Lack of secrecy, limited continuity
Ans a. Limited managerial ability, limited continuity

99 _______________ section of the business plan generally begins with the "mission
statement" by the entrepreneur describing the size, scope and nature of the enterprise.
a. Description of business Venture
b. Introductory profile
c. Industry profile

d. Entrepreneur’s biodata
Ans a. Description of business Venture

100 A Company is called an artificial person because ____.

a. it does not have the shape of a natural person.
b. it cannot be sued in the court of law.
c. it is invisible and intangible.
d. it exists in the eyes of law.
Ans d. it exists in the eyes of law.

101 Which of the following formats of business plan is not targeted towards the external
stakeholder?
a. Elevator pitch
b. A pitch deck with oral narrative
c. A written presentation for external stakeholders
d. An internal operational plan
Ans d. An internal operational plan

102 What is the minimum number of members required to start a public company?
a. 2
b. 5
c. 7
d. 50
c. 7

103 A company generally affixes a ………….in most of it’s documents

a. Common signature
b. Common Seal
c. Common affixture

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 d. Common annexure
Ans b. Common Seal

104 (i) Each partner is liable for acts performed by other partners
(ii) Each partner can bind other partners and the firm by his acts done in the ordinary
course of business. Which feature of partnership is highlighted by these two statements?
a. Implied authority
b. Utmost good faith
c. Mutual Agency
d. Agreement
Ans c. Mutual Agency

105 Karan has learnt the art of zardozi work from his grandfather and father. He opened a
designer boutique exclusively for bridal wear all by himself. He introduced new designs
in his work which is highly appreciated by everyone. What form of business organisation
is operated by him?
a. Sole proprietorship
b. Partnership
c. Private company
d. Public company
Ans a. Sole proprietorship

106 As per law, a business and owner are one and same in case of sole proprietorship. What
characteristic does this imply?
a. No separate legal entity
b. Separate legal entity
c. Legal entity
d. Legal equity
Ans a. No separate legal entity

107 What is the minimum paid up capital required to start a private ltd. Company?
a. Rs.1,00,000
b. Rs.10,00,000
c. Rs.5,00,000
d. Rs.50,00,000
Ans a. Rs.1,00,000

108 ………………. component of a financial plan helps to ascertain the highest possible returns
on investment.
a. Proforma investment decision
b. Proforma income statement
c. Proforma cash flow
d. Proforma balance sheet
Ans a. Proforma investment decision

109 Which form of business organisation can commence business immediately after
incorporation?
a. Public company
b. Private company
c. Partnership
d. Sole proprietorship
Ans b. Private company

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110 Sara had established a homemade papad business in Pune. Papads made by her were very
popular in her locality but being the sole owner and manager of business, she could
neither introduce many flavours because of limited financial resources. Which of the
following characteristic of her business, does this situation imply?
a. Individual management and control
b. Easy formation and closure
c. Limited area of operation
d. Unlimited liability
Ans c. Limited area of operation

111 Which of the following feature applies ONLY to a public company?

a. Can Start business after incorporation
b. Has a restriction up to 200 members
c. Can invite public to subscribe for its shares
d. Directors are not required to obtain qualification shares.
Ans c. Can invite public to subscribe for its shares

112 Which statement is NOT correct about the company form of business organisation?
a. Company form of business organisation can be incorporated with a minimum of two
members.
b. Company has an access to huge capital resources
c. Company is a legal person
d. Company has a separate legal entity.
Ans a. Company form of business organisation can be incorporated with a minimum of two
members.

113 Arvind started his manufacturing unit in Jammu and Kashmir. scarf, both woollen and
silk. His business was not picking up in the markets as desired. He found out the reason
his scarves were not selling was due to their colour. What could be the best source of this
information?
a. Manufacturers.
b. Retailer.
c. Competitors.
d. Government bureau.
Ans b. Retailer

114 The scope of the company form of organisation is determined by

1. The Companies Act 2013
2. Memorandum of Association
3. Articles of Association

a. Only 1
b. Both 1,2
c. Only 2
d. All 1,2,3
Ans d. All 1,2,3

115 Amaze ltd., is a company engaged in the manufacturing of air- conditioners. The company
has four main departments Purchase, Marketing & Sales, Finance and Warehousing. As
the demand for the product grew, the company decided to recruit more employees in the
Finance department and Marketing & Sales departments. Identify the component of the
business plan which will help the Human Resource Manager to decide and recruit the
required number of persons for each department.

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 a. Marketing Plan
b. Financial Plan
c. Manpower Plan
d. Organisational Plan
Ans c. Manpower Plan

116 Bhawna, Maya, and Advik’s interior design business was taking off in a big way. Their
talent was in high demand. Now, the trio needed to hire more employees. Since the needs
of their company were changing, they reviewed their personal circumstances, financ es,
and goals. They decided to legally organize their organization into one with a limited
liability. Identify the type of organization the trio will form.
a. Partnership
b. Public Company
c. Private Company
d. Company
Ans c. Private Company

117 Assertion (A): A company which is suffering huge losses can be shut down only by
following the procedures laid down in Companies Act.
Reason (R): A company can be born as well as liquidated only by law.

a. A is true but R is false.

b. Both A and R are true, but R is not the correct explanation of A
c. A is true and R is the correct explanation of A
d. Both A and R are false.
Ans c. A is true and R is the correct explanation of A

118 Match the following

a. 1 - iii, 2 - iv, 3 - ii, 4 - i

b. 1 - iii, 2 - ii, 3 - iv, 4 - i
c. 1 - ii, 2 - iii, 3 - i, 4 - iv
d. 1 - iv, 2 - iii, 3 - ii, 4 - i
Ans a. 1 - iii, 2 - iv, 3 - ii, 4 – i

119 Amar and Akbar started a partnership firm to help the poor and needy. They collected
money from various agencies and used it to benefit all those who are in dire need. Which
characteristic are they violating?
a. Agreement
b. Unlimited liability
c. Profit sharing
d. Utmost good faith
Ans c. Profit sharing

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120 Surya and his friend Chander are into developing sustainable products that are
environment friendly and at the same time carrying value for the customers. They want to
develop vegan leather by using Aloe vera. They met the officials from Venture Angles
company that promotes young entrepreneurs. Hopeful of a positive response they
submitted a detailed, well written, and pleasingly formatted plan. Identify the format of
business plan presentation used by Surya and his friend.
a. Elevator pitch
b. A pitch deck with oral narrative
c. A written presentation for external stakeholders
d. An internal operational plan
Ans c. A written presentation for external stakeholders

121 Prabhu first established Tanvi Foods in Coimbatore, as a partnership firm in early 2016
with his wife Brindha Vijaykumar and started with mango and apple juices. The business
did well in the first year with a turnover of Rs 40 lakh, and since then its revenue has been
growing. While the main concentrate of the drinks is made at the company’s own 4,000 sq
ft manufacturing unit in Coimbatore, the final product and bottling is done at third-party
units (TPUs) in Coimbatore, Krishnagiri, Dharmapuri, Chennai, Puducherry, Mysuru, and
Aurangabad. This has enabled them to scale up fast without needing much capital. What
kind of manufacturing operation is followed in Tanvi Foods?
a. No manufacturing involved
b. Partial manufacturing
c. Complete manufacturing
d. Complete outsourcing
Ans b. Partial manufacturing

122 Sankalp Singh Parihar cultivates the world’s most expensive Miyazaki variety of mangoes
at his farm in Dhedagoua village in Madhya Pradesh. The Miyazaki variety of mangoes he
grows at his farm sell at Rs 2.5 lakh per kg in Japan. In India he got a price of Rs 21000 per
kg, but he is yet to launch sales and is focusing on propagating the variety now. He
intends to plant more saplings and make the mangoes affordable for Indians and sell it for
as little as Rs 2000 per kg. He plans in such a manner that economic feasibility can be
achieved in a few years. Which part of the business plan highlights economic feasibility?
a. Organisational plan
b. Financial plan
c. Operational plan
d. Marketing plan
Ans b. Financial plan

123 Sindhuja was extremely good at making traditional sweets which she had learnt from her
grandmother. She decided to start selling the sweets through advertising in social media.
Her business picked up and she got a lot of orders from clients all across India. Seeing her
huge success, her friend Raman advised that she should open a shop in the market area to
expand her business. He expressed interest in the business and was ready to invest money
so that they could do the business together. What form of business organisation does
Raman and Sindhuja start?
a. Sole proprietorship
b. Partnership
c. Private company
d. Public company
Ans b. Partnership

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124 Monik Ltd., was the market leader in the Mobile Phone industry in 2000. The company
was well known for it’s affordable phones. In 2007, a new company launched new Mobile
models with latest technologies and captured the market. Monik Ltd., did not expect th is
and lost the entire market share and had to close their operations. Which of the following
SWOT analysis framework does this case indicate that Monik Ltd., failed to do?
a. Strengths
b. Weakness
c. Opportunities
d. Threats
Ans d. Threats

SAMPLE QP-2021-22-TERM 2

SAMPLE QP-2022-23

125 State any two characteristics of partnership form of business organization.

Ans 1. Two or more persons;
2. Agreement;
3. Profit sharing;
4. Unlimited liability;
5. Implied authority;
6. Mutual agency;
7. Utmost good faith;
8. Restriction on transfer of shares;
9. Continuity (Any two in detail)

126 Why is a private company more desirable than a public company. Give any two reasons.
Ans 1) Only two members are required to form a private company.
2) Only two directors are required to constitute the quorum to validate the proceedings of
the meetings.
3) Such companies can file a statement in lieu of a prospectus with the Registrar of
Companies.
4) It can commence its business immediately after incorporation.
5) Holding of a statutory meeting or filing of a statutory report is required by a private
company.
6) A non-member cannot inspect the copies of the profit and loss A/c filed with the
Registrar.
7) Limit on payment of maximum managerial remuneration does not apply to a private
company.
8) Restrictions on appointment and reappointment of managing director do not apply.
9) Maintaining an index of members is not required by a private company.
10) Directors of the private company need not have qualification shares. (Any two points)

127 State any one advantage each for a company that opts for private placement and rights 2
issue as a source to raise funds.
Ans Private placement: The company can keep its confidentiality as at times they do not wish
to disclose information to the open market.
Rights Issue: It does not require any brokers, agents, underwriters, prospectus or
enlistment, etc.

128 What does the manpower plan help to assess?

Ans The manpower plan helps to assess three things.

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 1. What kind of people are required? Each organisation needs personnel with the
necessary qualifications, skills, knowledge, experience and aptitude for work. The
entrepreneur must clearly state: (a) what kind/type of person is required to be hired for
getting his work done. (b) State the personnel ranging from managers, supervisors,
administrators, engineers, technical, skilled and unskilled class. (c) Nature of business
activity which will help in deciding the type of manpower required.
2) How many people are required? This question deals with the quantity of personnel the
enterprise needs. The number of people required for various positions throughout the
enterprise gets affected by: a) The total work to be done. b) How much work can an
average person do in a specified period of time. c) Level of absenteeism expected. d) Rate
of labour turnover. e) The present number of employees. f) The future plans for expansion
and diversification.
3) How to procure personnel? As the next step in manpower planning, entrepreneur
clearly mentions the strategies, methods, policies, rules and regulations pertaining to
persons with respect to Recruitment, Selection and Training.

129 Explain the first three steps involved in preparing the marketing plan
Ans 1) Business situation analysis - A review of past performance and achievements of the
enterprise are stated here in but for a new venture, focus shifts rather towards: a) Personal
profile of the entrepreneur b) Emphasis on products development c) What 'need' it
satisfies d) Any other enterprise/experience of the entrepreneur e) Any marketing
segmentation, if planned.
2) Identify the target market - For a new venture, it's very essential to clearly define the
specific group of potential customers whose needs the enterprise aims to fulfill. This
identification of the "target market" is a pretty tedious task as it involves: a) Deciding what
the general market or industry entrepreneur wishes to pursue is based on market research
or industry analysis done and complied with by competent people or the entrepreneurs.
Divide the market into smaller groups based on: i) Consumer's characteristics viz.
Geographic (State, Country etc.) Demographic (Sex, age, etc.) Psychographics (Personality,
lifestyle, etc.) ii) Buying situations viz. Buying conditions (time available etc.) Usage
Desired benefits (features of product) c) Select segment or segments to target. d) Develop
a marketing plan integrating according to product, price, distribution, promotion.
3) Conduct SWOT analysis It is important for the entrepreneur to consider in the 'target
market' his/her enterprise's: a) Strengths b) Weaknesses c) Opportunities d) Threats.
Marketing plan needs to consider the strengths and weaknesses of the new venture to
ensure its success.

130 The entrepreneur should develop a sound financial plan as timely availability of funds in
the right volume is key to entrepreneurial success. In the light of the given statement,
examine the relevance of a financial plan for an entrepreneur.
Ans Availability of finance facilitates the entrepreneur to bring together men, material,
machines and methods to produce goods/services. The financial plan should be able to
meet all financial obligations and the company should maintain its liquidity in order to
pay off the debts and also provide good returns on the investment made. Financial plan
must project:
a) The potential investment commitment needed for the new venture, and
b) Economic feasibility of the enterprise The entrepreneur uses various financial projection
techniques and tools to draft the financial plan. The entrepreneur will need to present
three years of projected financial data to satisfy any outside investors.

131 What is the need for a business plan? Elaborate on various formats in presenting a 5
business plan to prospective investors?
Ans It helps the entrepreneur to frame a formal statement enlisting a set of business goals, the
reasons as to why they believe that it is attainable and the plan for reaching those goals
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 along with the background information about the organization or/and team attempting to
reach those goals. Formats of business plan:
i)Elevator pitch: It is a three minute summary of the business plan's executive summary.
This is often used as a teaser to awaken the interest of potential funders, customers, or
strategic partners.
ii) A pitch deck with oral narrative : A hopeful, entertaining slide show and oral
narrative that is meant to trigger discussion and interest potential investors in reading the
written presentation, i.e. the executive summary and a few key graphs showing financial
trends and key decision making benchmark.
iii) A written presentation for external stakeholders: A detailed, well written, and
pleasingly formatted plan targeted at external stakeholders.
iv) An internal operational plan: A detailed plan describing planning details that are
needed by management but may not be of interest to external stakeholders.

132 Aarushi finished her Bachelors degree in Management and decided to join Paras 5
Pharmaceuticals. She was placed under the department which oversaw the exact route of
each individual item. Her supervisor Kumar explained that their department plays a very
important function of looking into the movement of material, performance of machines
and operations of labour. She was surprised and asked Kumar the reason and he further
explained that the department makes a plan for every item which will ensure the orderly
flow of materials from raw material stage to the finished product stage and this will
enable continuous production always. He further elaborated on various systems used for
quality control. Kumar showed her an existing plan and asked Aarushi to devise a plan
incorporating all that he had explained. Explain the first five elements involved in this
plan.
Ans Aarushi had joined the Operations Department and Kumar was explaining to her about
the elements involved in the operational plan. The following are the first five elements
involved in the plan:
1) Routing: It is a process concerned with determining the exact route or path a product/
service has to follow right from raw material till its transformation into finished product.
2) Scheduling: It means fixation of time, day, date when each operation is to be
commenced and completed.
3) Dispatching: The process of initiating production in accordance with a pre-conceived
production plan is said to be dispatching. This includes issuing necessary orders,
instructions, guidelines and/or information to work pertaining to giving practical shape
to the production plan.
4) Follow-Up: This element relates to evaluation and appraisal of work performed. A
properly planned follow-up procedure is helpful in dispatching errors and defects in the
work.
5) Inspection: It is the art of comparing materials, product or performance with
established standards. This element helps the entrepreneur to set up laboratories or evolve
strategies/methods to ensure predetermined quality of product/service

SAMPLE QP-2023-24

133 Mr. Dhambani is the CFO of Cherico Industries. He has to present the analysis of the
financial health of the company during the last financial year, 2022 -2023. He is making a
presentation for the Annual Board Meet. To clearly explain the position he needs to work
on:
i. Financial Plan
ii. Economic order quantity
iii. Return on Investment
iv. Break Even Analysis
v. Return on Equity
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 a. i and ii
b. ii and iii
c. iii and v
d. iv and v
Ans

134 Identify the various factors which will help the entrepreneur as well as the potential
investor from the organisational plan.
i. Long-term effectiveness of the enterprise
ii. Profitability
iii. Specifying the types of skills needed and the roles that must be filled by the members
iv. the attitudes, behaviours, dress, communication styles etc., thus chalking out informal
organisation

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

135 What are the three most likely situations which arise before any firm while preparing the
production plan?
Ans

136 Enlist any three points of importance in framing the business plan.
Ans

137 The production plan aims at "plan your work", whereas operations plan ensures "work
your plan". In the light of the given statement, examine the relevance of a operational plan
for an entrepreneur.
Ans

137 Karthik is in the business of manufacturing laptop components since 2010. They have 5
been supplying their parts to all major manufacturers. His son Harsh took over the factory
in 2022. He had done his Masters in Business Administration and wanted to expand the
operations of the company. He planned to start manufacturing laptops to be sold in th e
Indian market. He discussed the idea with his financial team. They estimated the cost of
the project to be around Rs. 65 crores. They decided to take the required funds from
potential investors. The financial team of the company decided to make a plan which will
explain to the potential investor the ways and means of how the entrepreneur plans to
meet all financial obligations. Explain any five components of this plan.
Ans

YEAR 2024

138 'Air-Puro Ltd.' is engaged in manufacturing and distribution of Production, air-purifiers.

The company has four departments Marketing, Finance and Human Resource. The quality
of the air-purifiers is very good and these are handy also. Due to this the demand of air-
purifiers started growing. To meet the growing demand, the Production Head informed
the Chief Executive Officer to recruit more employees. Technological The component of
Business Plan which will help in deciding the number of people required is :
a) Marketing plan

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 b) Production plan
c) Organisational plan
d) Manpower plan
Ans

139 Manoj. Ankit and Nikhil are good friends and doing interior designing business at a
small-scale. Their business is taking off in a big way. Now there is a need to change their
small-scale-business into a large-scale-business. The trio needs more capital to invest, to
hire more employees and for other expenses. Due to the growing need they decided to re-
organise their form of business. Now they wanted to have an organisation in which
members have a limited liability and minimum paid-up capital is Rupees one lakh. The
type of organisation the trio wanted to form is:
(a) Partnership
(b) Private company
(B) Public company
(D) Sole proprietorship
Ans

140 What is a Business Plan’? State any two points why Business Plans are considered as
decision-making tools.
Ans

141 Explain the following elements of an operational plan: 3

i. Scheduling
ii. Inspection
iii. Follow-up
Ans

142 Give the meaning of 'Company' form of business organisation. Explain the following
features of a company:
(i) Seperate Legal Entity
(ii) Limited Liability
(iii) Transferability of Shares
(iv) Diffusion of Ownership and Management
Ans

143 Aneesh, a young entrepreneur, wishes to take his family business of designer fabrics to
greater heights with the knowledge he has acquired at National Institute of Fabric
Development'. His father gave him 25 lakh as a seed capital to start his own new product
line under the family business. 30% Aneesh is venturing into leather and faux leather for
which he needs to plan his business before he goes ahead with the execution. He knows
that transformation of raw material into finished products takes place with the help of
energy, capital, manpower and machinery. Further. he realised that manufacturing
operations are highly complex and tedious, hence need to well planned.

A) Identify the component of business plan Aneesh is discussing about. Also state its
objective.
B) Explain the three different options available before the venture.
Ans

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