Enterprise Marketing — Entrepreneurship STD 12 Commerce — Question

What are the factors involved in sensing opportunities?

Name any three Central level financing institutions and explain how they support entrepreneurs.

Venkat and his sons were in family business. Venkat took all decisions regarding business, as being eldest in the family. Venkat was taking bad decisions and the business was suffering losses. There was a huge debt burden too. The son's were not allowed to take any decisions and even inspect the books of accounts. Venkat had to sell off his house to set off debts, whereas sons were not responsible for the debt settlement.

1. What form of business is being followed.
2. Highlighting the lines, give two characteristics of Joint Hindu Family Business.

What is the cost of budgeting?

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?

State five elements of business opportunity.

Scanning of opportunity is the link between 'sensing opportunities' and 'entrepreneurial success'. Explain this statement with a suitable example.

What is PESTEL model? Explain it.

An individual wants to start an enterprise that manufactures steam iron, which can be imported from Germany. The material available in Germany is a little better in quality. However, there are no safety issues with the one available in India. Which material would you go for and why? (social responsibility, import substitution).

Differentiate between:

1. Direct cost and Indirect cost.
2. Semi-variable cost and Variable cost.