About this previous year paper
SECTION A
(2 × 10 = 20 | Very Short Answers)
a. Who is an entrepreneur?
An entrepreneur is a person who identifies business opportunities, takes risks, organizes resources, and starts a new venture to earn profit.
b. Characteristics of an entrepreneur
Key characteristics include innovation, risk-taking ability, leadership, creativity, self-confidence, decision-making skill, and perseverance.
c. Project identification assessment of viability
It is the evaluation of a project’s technical, financial, market, and economic feasibility to determine whether it can be successfully implemented.
d. What is a project report?
A project report is a detailed document that describes the technical, financial, managerial, and economic aspects of a proposed project.
e. Who prepares the balance sheet?
The accountant or finance manager of the organization is responsible for preparing the balance sheet.
f. Cash flow as a planning tool
Cash flow helps in planning by showing expected cash inflows and outflows, ensuring liquidity and proper financial control.
g. Uses and limitations of fund flow statement
Uses: shows sources and uses of funds.
Limitations: ignores cash position and short-term financial changes.
h. Definition of wages
Wages are the monetary compensation paid by an employer to workers for services rendered.
i. Workers’ compensation
Workers’ compensation is a statutory payment provided to employees for injuries or disabilities suffered during employment.
j. Elements of a partnership
Agreement, profit sharing, lawful business, mutual agency, and association of persons.
SECTION B
(Attempt any THREE | 3 × 10 = 30 Marks)
2(a) Types of entrepreneurs & suitability for India
Entrepreneurs are classified as innovative, imitative, Fabian, drone, social, women, and technical entrepreneurs.
For India, innovative and social entrepreneurs are most suitable as they promote employment, innovation, and inclusive growth.
2(b) Components of a project report
Major components include: Executive summary
Market analysis Technical feasibility
Financial analysis Organizational structure
Risk assessment
Market analysis studies demand, competition, pricing, and customer behavior to ensure market viability.
2(c) Objectives of preparing a balance sheet
A balance sheet shows the financial position of a business, helps assess solvency and liquidity, aids decision-making, and assists investors and lenders.
2(d) Functions used in financial analysis
Financial analysis uses ratio analysis, trend analysis, cash flow analysis, fund flow analysis, and break-even analysis to evaluate profitability and stability.
2(e) Government policy for small-scale industries
Government policies include credit support, subsidies, tax benefits, skill development, marketing assistance, MSME schemes, and infrastructure development.
SECTION C
3(a) Role of small-scale industries in Indian economy
Small-scale industries generate employment, promote entrepreneurship, reduce regional imbalance, support exports, and contribute significantly to GDP and industrial output.
3(b) Contribution of small-scale industries to economic development
They enhance income distribution, utilize local resources, promote innovation, support rural development, and reduce dependence on large industries.
4(a) Precautions while preparing a project report
Precautions include realistic assumptions, accurate data, proper market research, financial accuracy, risk assessment, and compliance with legal norms.
4(b) Financial requirements for project preparation
Financial requirements include fixed capital, working capital, contingency funds, marketing expenses, and operational costs.
5(a) Seven stages of project report preparation
Idea generation Preliminary analysis
Market study Technical analysis
Financial analysis Risk evaluation
Final project report preparation
5(b) Financial viability check by external agencies
External agencies evaluate profitability, cash flow, break-even point, debt-servicing capacity, and risk before approving loans.
6(a) Cost of capital approach
It evaluates investment decisions by comparing expected returns with the cost of funds to determine project feasibility.
6(b) Risk analysis: sources & measurement
Risk analysis identifies uncertainties.
Sources include market risk, financial risk, operational risk, and environmental risk.
Measurement tools include probability analysis, sensitivity analysis, and scenario analysis.
7(a) Benefits under workers’ compensation insurance
Benefits include medical expenses, disability compensation, death benefits, wage replacement, and rehabilitation support.
7(b) Partnership & co-ownership (Indian Partnership Act, 1932)
Partnership is a voluntary association formed for profit sharing with mutual agency.
Co-ownership involves shared ownership without profit motive or mutual agency.