Entrepreneurial Opportunity — Entrepreneurship STD 12 Commerce — Question

Raman is a potential investor who wishes to be a part of Equity Linked Saving Scheme (ELSS). He has given the particulars of two companies to seek your advice for investment. Compare the Return on Equity of the two companies and suggest to Raman where he should invest.

Particulars	Alpha Ltd. ₹	Beta Ltd. ₹
Total Capital Invested	20,00,000	20,00,000
Owned Funds	10,00,000	10,00,000
Interest on Borrowings from Bank	60,000	50,000
Cost of Goods Sold per month	7,00,000	8,50,000
Monthly Sales Revenue	10,00,000	15,00,000
Salaries	2,40,000	3,60,000
Utilities	75,000	1,00,000
Depreciation	5,500	6,000
Tax Rate	20%	25%

'It is an organised mechanism meant for effective and smooth transfer of financial resources from the investors to the entrepreneurs.'

1. Identify the mechanism and list its different types.
2. Name the association of persons established under the mechanism identified in (a) above. Also, explain any four points of its importance to investors.

“Stock exchange imparts liquidity to investment.” Comment.

An entrepreneur can raise the required capital in the primary market. Explain the various methods of raising the funds in the primary market by an entrepreneur. Give some value points for this method of raising funds.

Explain direct and indirect competition with an example for each.

Enlist the formalities for starting a business in India.

Define 'Creativity'. Explain the five stages of the 'creative process'.

Identify the following items as inflow/outflow. Also give reasons for your choice.

1. Raw material.
2. Depreciation.
3. Machinery purchased.
4. Loan from bank.
5. Equity shares issued.
6. Excise duty paid.
7. Profit on sale of asset.
8. Interest received on investments.

While selecting a brand name, what care must be taken by a entrepreneur?

Give examples of failure of franchisee due to inability to provide services.