Entrepreneurial Planning — Entrepreneurship STD 12 Commerce — Question

For what purpose is finance required right from the very beginning, i.e. conceiving an idea?

How many sources of funds are available for arranging funds for business enterprises?

What do you understand by sales mix?
State the assumptions made for the calculation of breakeven point for sales mix.

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?

One of the steps of the process of mergers and acquisitions is 'Due diligence'. What is meant by it and what purpose does it serve? What value is reflected by a company by ensuring that this step is followed?

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

Explain by giving any three points how ‘market-orientation’ helps the entrepreneurs.

What is the procedure for obtaining registration?

ChryslerTop management in all divisions overspent, especially, in new product development and generous union contracts were continually signed year after year. Vehicle prices soared with little consumer incentives and franchised dealers were placed in the position of moving product which consumers didn't want.
The Chrysler Crossfire, when introduced was fine but had many mechanical problems, as did the Sebring. When the PT Cruisers came out, the marketing was great but the assembly lines couldn't keep up with the demand and many turned to other manufactures who were tired of waiting for PT Cruisers to hit showroom floors. Too many product lines were dropped or modified leaving Chrysler fans up in arms. Loyal Jeep owners weren't pleased with the stoppage of the base Cherokee. Still, spending continued with little concern for regaining profits to pay expenses. In the end, Chrysler, LLC was forced through a bankruptcy restructuring and now ownership is very diverse including the entering Fiat Still, brand loyalty or Chrysler is at an all time low.

1. What, according to you, is the principle reason for Chrysler's failure?
2. What was the basic problem with Chrysler Crossfire, Sebring and PT Cruisers?
3. Was poor management also a factor responsible for Chrysler's failure?

Answer each of these questions in about fifty words:
How stock options lead to enable employees to become shareholders and share the profits of the company?