Entrepreneurial Opportunity — Entrepreneurship STD 12 Commerce — Question

How do primary and secondary markets promote capital formation?

What is PAN? Why is it required?

Explain the concept of ‘circulating capital’ with the help of an example.

Explain the role of financial planning in financial management.

Value chain analysis works towards one goal. What is it?

Name and explain the concept which states that at a particular volume of production, a firm os neither makes a profit nor a loss.

Abhiraj Ltd., an Indian company, started functioning in 1999 and was registered under the Companies Act, 1956. The Securities and Exchange Board of India performed one of its functions and conducted investigations against Abhiraj Ltd. The investigations resulted into the fact that the company did not follow the proper procedure. Therefore the Securities and Exchange Board of India imposed penalty upon the company.

1. Identify the function being performed by the Securities and Exchange Board of India (SEBI).
2. Can Abhiraj Ltd. appeal against SEBI’s decision? If yes, where?

Source of Finance
Money is Always a Problem
'Air India has defaulted on working capital loan interest payment of 200 crores due to the financial crisis that the airlines is facing' confirms Air India sources on 21st May, 2011. Air India has high-cost loans worth about 40000 crores.
Air India is facing a tight financial situation and is in talks with lenders to restructure its debt of ₹ 40,000 crores. The lenders have agreed to reduce interest rates on part of the debt that is linked to overseas borrowings. The future of the remaining debt is still uncertain, especially because lenders are seeking a conversion of their debt into equity or equity like instruments. This is perhaps the first time that the national carrier has defaulted on its payments to banks. Sources said the airline had approached banks for more loans but they have declined to help because of the airlines' poor financial health.
And they say 'finance is difficult for new entrepreneurs.......... Its always a major concern.

1. Air India' has high cost loans worth about ₹ 40,000 crores. From the above statement, identify the source of finance Air India.
2. Give one advantage and one disadvantage of raising finance through this source.
3. What will be the effect of conversion of debt into equity on the financial health of the company?

Hinduja Finance acquired Ashok Leyland Information Technology, so that the accumulated losses of Ashok Leyland Information Technology could be set-off against its book profits. What form of benefit is discussed here? Explain.

'Government regulations affect choice of channel of distribution'. How?