Entrepreneurship 5 Marks Question

(I) Distinguish between angel investors and venture capitalists.
(II) Describe the role of an angel investor in an entrepreneurial venture.

(I) ‘The highly anticipated Initial Public Offer (IPO) of Life Insurance Corporation of India (LIC), emerged as the largest turnout in terms of public participation in the nation's history.’
Identify the type of capital market LIC of India has approached.
(II) Distinguish between the two types of capital markets.
(III) ‘Capital markets are an important source of raising finance for entrepreneurs.’
Justify the statement, giving valid reasons in support of your answer.

Zoke Ltd. manufactures eco-friendly furnishing and upholstery products. The fixed cost for the production process is ₹ 22,56,000.
The following information is available about its range of products:

Variety	Cushion covers (per pair)	Curtains (set of two pairs)	Bed covers (Standard King size)
Selling Price (in ₹)	555	1150	1550
Variable Cost (in ₹)	275	550	750
Sales Mix	30%	40%	30%

From the given data, calculate the following;
(I) Total weighted average contribution margin.
(II) Breakeven Quantity for each product.
(III) Break-even point (in ₹) for a pair of cushion covers.

Read the following text carefully:
Mr. Prasad started a cakes and confectionery business in 2010 by the name of ‘Happiness to Order’. In no time his bakery became the talk of the town for customized cakes as per the occasion. He used high-quality liquid glucose and icing sugar to make the fondants for his cakes. Seeing the popularity, he opened 4 more outlets in different localities.
Over the years people have become cautious of what they eat and are cutting down on sugar. The fondants that were once the USP of his bakery were now losing market to the competitors as they introduced a healthier version of bakery products, especially cakes without gluten or sugar but almond flour, oats flour, etc.
His cooks advised him to experiment with healthier options which Mr. Prasad was reluctant to try. He could not adapt to the changing environment and all 5 outlets started running into loss. Eventually, he decided to close the business. He owes ₹ 15,00,000 to his supplier firm whom he had taken goods on credit in the past year.
On the basis of the given text and common understanding, answer the following questions:
(I) Mr. Prasad’s business funds are insufficient to repay the debts, can the supplier claim Mr. Prasad’s assets? Give valid reasons in support of your answer.
(II) “Environment scanning is important for an entrepreneur.” Justify the statement, giving valid reasons in support of your answer.

‘Pricing can also be used as a demarcation, to differentiate and enhance the image of a product’
(I) In the light of the above statement, explain Penetration and Skimming as two important pricing strategies that can be used by an entrepreneur.
(II) Give any two advantages of both Penetration and Skimming strategies.

Elaborate the advantages of a franchise form of business to a franchisee.

Read the extract below:
As the world is drowned in the rubble of plastic it has become a now or never situation to protect the world. Indian entrepreneurs, Mrs. and Mr. Smith launched ‘Green India’ in 2021 with the aim to provide a simple replacement for harmful plastic with bamboo-based products.
Using technology for processing of the bamboo plant, the brand has developed around 22 products, with manufacturing around 30 lakh Bamboo toothbrushes which have been delivered across India and 18 countries in the world. “India is the second-largest bamboo grower in the world and also one of the biggest bamboo importers. It made me think about how we are underutilising our bamboo resources,” comments Mr. Smith. This agripreneur has since engaged 4,000 farmers from villages of Nanded in Maharashtra to manufacture products.
After completing his masters degree from the University of Maharashtra, he joined the IT industry in France. It was there that the idea of starting a sustainable business struck him. He was supported by his wife who helps with human resources and accounts. He gives credit to social media platforms for the boost to sales and growing popularity of eco-friendly products.
Green India is now looking to add another 1,000 families to completely depend on their products. Their major aim is to reduce 1 million kilogram of plastic waste every year from next year onwards.
On the basis of the given text and common understanding, answer the following questions:
(I) Identify the idea field used by Mr. Smith to launch the business.
(II) Explain any two more idea fields, other than the one identified above.
(III) Giving reasons, mention any two socio-economic benefits that the above business has.