Business Arithmetic — Entrepreneurship STD 12 Commerce — Question

What is meant by capital? Why does a business needs capital?

The footwear industry in India is dominated by ‘B-relax Footwear’. ‘B-relax Footwear’ procures 70% of its raw material from ‘Polymers Ltd.’ The major production of ‘Polymers Ltd.’ is plastic chips, PU foam and elastic which is used by ‘B-relax Footwear’ in its manufacturing processes. After due diligence, they decide to merge with each other. If they merge, ‘B-relax Footwear’ doesn’t need to look for a vendor and sourcing raw materials would be seamless. On the other hand, as a result of the merger, ‘Polymers Ltd.’ doesn’t need to worry about the sales and marketing. All they need to do is to improve their processes to produce better raw materials for ‘B-relax Footwear’. After the merger the combined entity will be known as ‘B-relax Inc’.

1. Identify and explain the type of merger between ‘B-relax Footwear’ and ‘Polymers Ltd.’
2. Why is due diligence required before merger ?
3. Which is the most dominant reason for this merger ? Explain.

Explain any two inputs required for designing a 'Sales Budget'.

State the important considerations that an entrepreneur should keep in mind while purchasing the right quality and quantity of material at a right time and price.

List certain specified transactions where quoting PAN is mandatory.

How business environment can be classified into different categories?

While 'assessing the market', explain what is assessed under supply and nature of competition?

Answer each of these questions in about fifty words:
Explain the need and importance of Specialized Financial Institutions in India?

Rekha, a sole proprietor has grown her business over the years of selling fashion accessories. She started with one shop but now has three in different localities.
She wants to expand even further but she has limited finances. She is thinking of going into partnership with her friend who is very much interested in joining her.

1. Explain two benefits of remaining a sole proprietor.
2. Explain two benefits and two limitations of partnership.

Raghav, an entrepreneur realises that the enterprise he wants to start, has a potential risk of fire accidents because the production process poses such a threat. Should he develop strategies to:

1. Prevent the risk?
2. Respond to the risk?
3. Prevent as well as respond to the risk? Give reasons.