Professional Documents
Culture Documents
SAMPLE PAPER
2016-17
Time allowed: 3 hours Maximum Marks: 70
S. No. Questions/ Expected Value Points Unit/Typo Marks
1. Name the two things that are taken care in a reorder point? 5 (U) 1
Ans. Lead time and Demand during lead time.
2. Deepak Ltd., has been manufacturing cycles since 2010. Their market 6 (App) 1
share in this field is 35%. They decided to introduce new cycles with
advanced gear systems in 2015. For the same they estimated their financial
requirements to be 20 crore.
They decided to raise the same through a limited number of sophisticated
investors. Identify this kind of issue?
Ans. Private placement
3. Rishabh lives in Vijay Nagar, a residential colony near Delhi University 1(HOTS) 1
(DU). Being close to DU this area is a hub for students who come from
outside Delhi to study here as they find good accommodation with Tiffin
service readily available. Rishabh has a vacant residential building there.
He found it to be an attractive economic idea to start a Paying Guest
House. He knows that he has a good market because of the location of his
building. State the other requirement he has to ensure before opting for this
opportunity.
Ans. The rate of return on the investment has to be attractive to be accepted by
him.
4. What is meant by ‘private sector enterprise’? 2/ (R) 1
Ans. Private sector enterprises are those which are owned, controlled, and
managed by private individuals, with the main objective of earning profit.
5. State the role of a sales person in personal selling. 3/ (R) 1
Ans. Companies appoint salesperson to contact prospective buyers and create
awareness about the company’s product.
6. What is meant by seed capital financing? What the entrepreneur has to do 6 (R) 2
to convince the investor to get money?
Ans. It refers to the capital required by an entrepreneur for conducting research
at pre commercialization stage.
The entrepreneur has to convince that his idea was worthwhile to the
investor.
7. Ragini, a career oriented mother, hardly got time to cook for the family. 1/App 2
She decided to hire a cook but was not able to find one who could cook
according to the taste of the family. Her sister Abha sensed that this
problem is not only faced by her sister but also by many working women.
She launched a website namely ‘Dial for food’ where housewives who had
culinary ability and were interested to cook could drop in their contact
details and households where specific cuisine was required could leave in
their requirements so that through the website home cooked food could be
delivered. The website mainly helped in identifying the requirement and
fulfilled it through providing delivery service. Identify any two uses of
problem identification to Abha.
Ans. 1. Bring out new products in the market
2. Increase employment generation
b. 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.
10. Rohan a budding musician created a lot of musical notes for his upcoming 3/HOTS 2
video. He was extremely thrilled to listen to his compositions. He
presented his compositions to his friend Victor. The release of musical
video of Rohan was getting delayed for a few months due to shortage of
cash. Meanwhile Victor used most of the musical compositions of Rohan
in his video.
Rohan was extremely upset to know that his friend had cheated him and
used all his work. What could have Rohan done to save his work?
Identify and explain it.
Ans. Rohan should have copyrighted his work. It gives the creator of original
work exclusive rights to it, usually for a limited time.
11. Bhushan and Vinay were pursuing Electrical Engineering from a 6/HOTS 3
prestigious engineering college. During their third year they developed a
solar LED bulb which can be used indoors. The bulb had a small panel
which had to be charged at a stretch for 10 hours in the sun and it would
last for 200 hours of usage.
The idea was risky as there was a possibility that the market might not
accept such a product, but if they do so, then, there would be a revolution
in the power industry as it would lead to saving of power in every
household.
The prototype was made but to manufacture and distribute the same, they
required around 5 crores.
Both Bhushan and Vinay approached some affluent individuals who were
ready to invest in their business in exchange for a convertible debt.
Identify the type of investors and state any two features of the same.
Ans. Angel Investor
Features (Any two)
1. Most angel investors are current or retired executives, business
Equity = Y 3,00,000
Loan = Z 2,00,000
Fixed Expenses:
CALCULATION OF ROE
1,02,120 x 100
3,00,000
13. Explain how the following factors affect idea and opportunity assessment. 1/R 3
a. Application and use
b. Level of operation
c. Competition
Ans. 1. Application and use
Ideas should be examined for their real life use and application. If it
already exists in the market, we will have to find out its present use, and
then we may think of modifying it for better use. In the above mentioned
example, we can clearly see that even though there are many companies
manufacturing pen drives, the latest will be in consonance with the
upcoming trends.
2. Level of operation
This is a crucial test for product/service identification. Depending on the
use of the product/service the entrepreneur will produce it in a cottage
industry or a small scale–industry or a large–scale industry.
3. Competition
Any product or service will face market competition at some stage. So
market competition should be assessed through a study of the trends in
demand and supply.
14. Sensitivity to environmental factors is crucial for an entrepreneur. With an 1/EV 3
appropriate example explain the relevance of the statement.
Ans. Importance of environment: (Any three)
For example, Sony failing to understand the changing trends in mobile
phones and therefore losing its market share.
For expansion purposes he required money and the chief financial officer
of his company suggested that they raise the required funds directly from
the public. Hemant also decided to open a hospital and a skill development
centre for the villagers in the evening wherein they can learn a lot of new
skills.
Explain the method of raising funds directly from the public and the
primary advantage that Hemant stands to gain from it.
Ans. Public issue- it is the most popular method of raising capital. It can be (1 + 1
raised directly from the public through issue of prospectus. The + 1 +
entrepreneur is required to comply with all the restrictions and formalities 1)4
pertaining to the initial issues.
The primary advantage that an entrepreneur stands to gain is – access to
capital
Values: Teaching the villagers new skills which can lead to more means of
earning money.
Opening a hospital – giving accessible medical facilities
20. Kapish an unemployed graduate got training for automobile repairing and 2/U 4
allied services 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. It is common, especially for start-ups, to have four formats as follows for 1*4=4
the same 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 of
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.
21. ‘Employee relationship management is a process that a company uses to 3/EV 4
effectively manage interactions with employees to achieve the goals of the
organization’. In the light of the statement;
(a.) explain any three factors that lead to effective employee relationship
(b.) state any two values that the company may communicate when it tries
2. It is very important that the salesman must know his product. In this case
start-ups are the, salesman. Therefore, start-ups take up training to
understand the product and franchisors make franchises fully conversant
with the product/services that they have to offer. Franchisors charge a fee
for this purpose and their motive at every step is ‘Pay and Smile.
3. Start-ups can grow rapidly without having to increase labour cost and
other operating costs because generally buyers walk up to them straight
away.
Unit/Marks 1 2 3 4 6 Total
Marks
Unit 1 1 2 (U & 2 (R & 1 17
(HOTS) App) EV) (HOTS)
Unit 2 1 (R) 1 (App) 2 (R & 1 (U) 13
HOTS)
Unit 3 1 (R) 1 1 (U) 1 (EV) 10
(HOTS)
Unit 4 1 (R) 1 (App) 10
Unit 5 1 (U) 1 (App) 1 (App) 10
Unit 6 1 (App) 1 (R) 1 1 (Value) 10
(HOTS)
5 5 7 4 3