Enterprise Marketing — Entrepreneurship STD 12 Commerce — Question

Siddharth is an innovative entrepreneur. He has decided to open an online portal which helps people to order food items 24 x 7. But, before implementing his project, he wants to investigate the marketability of his idea. He approached a venture capitalist to fund his investigation. Which form of finance is Siddharth availing of?

R and S Co. manufacturing plant that produces four different types of machine tools and their cost, price and BE Qty. The fixed costs are allocated - taking into consideration the utilization of common resources for different products.
Here is the basic data-
Products: P, Q, R and S
Selling Price: ₹ 2,00,000; ₹ 1,0,000; ₹ 1,40,000 and ₹ 4,00,000 respectively
Variable Cost: 560,000; 350,000; 360,000 and 200,000 respectively
Allocated Fixed Expenses per month:37,00,000; 35,00,000; 320,00,000 and 530,00,00 respectively.
Compute of Break Even level and explain how it will effect the company if product units fails to move beyond Break even level.

State whether the following require small or large working capital. Answer should be SEO supported by a valid reason:

1. Selling ice-creams.
2. Following a liberal credit policy.
3. Dealing in stainless steel wares.
4. Using capital intensive technology.

“Stock exchange imparts liquidity to investment.” Comment.

Calculate break-even point for a textile shop on the basis of the given information. Garments sold are silk sarees, cotton sarees, suit materials, kids wear.
Selling prices (in ₹).
Silk sarees = ₹ 3,500/ saree, Cotton sarees = ₹ 900/ saree.
Suit materials = ₹ 1,800/ suit, Kids wear = ₹ 450/ wear.
Variable cost.
Silk sarees = 1,050 pieces, Cotton sarees = 270 pieces.
Suit materials = 540 pieces, Kids wear = 135 pieces.
Allocated fixed expenses.
Silk sarees = ₹ 2,45,000, Cotton sarees = ₹ 1,57,500.
Suit material = ₹ 63,000, Kids wear = ₹ 70,875.

Raj Singh has started a restaurant on a National Highway in the name of 'Desi Dhaba' by spending Rs. 25,00,000. He invested Rs. 10,00,000 of his own and took a loan of Rs.15,00,000 from Dena Bank, @ 6% per annum. His monthly sales revenue is Rs. 17,00,000 and cost of goods sold is Rs. 9,00,000. He pays monthly salary of Rs. 3,00,000 to his employees. The tax rate is 25%.
You are required to calculate:

1. Return on Investment and,
2. Return on Equity for Raj Singh.

Why there is a need for cash flow projection?

An enterprise of watch making was having seven members in the business. The eldest member was the Father and rest all were 5 sons and one daughter. Sarita, the daughter, was the eldest and was working after the control of the business. Recently she got married and after marriage she wanted the control. But she could not gain the control.

1. Identify the type of enterprise.
2. Why the daughter could not regain the same control in the business?
3. Mention the legal formalities involved in creation of this type of enterprise.

'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?

‘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.