(SEM VII) THEORY EXAMINATION 2018-19 ENTREPRENEURSHIP DEVELOPMENT

SECTION – A

(Attempt all questions in brief – 2 × 10 = 20 marks)

(a) Define Entrepreneurship

Entrepreneurship is the process of identifying business opportunities, organizing resources, and taking risks to start and manage a business for profit and growth. An entrepreneur plays a key role in innovation, employment generation, and economic development.

(b) Who is an Entrepreneur?

An entrepreneur is a person who starts a new business by taking financial and personal risks. He or she introduces new ideas, manages resources efficiently, and aims to create value and earn profit.

(c) Characteristics of an Entrepreneur

An entrepreneur is innovative, confident, and willing to take risks. He has leadership qualities, decision-making ability, and the motivation to achieve business goals despite challenges.

(d) Role of Entrepreneurship in Economic Development

Entrepreneurship helps in generating employment, increasing production, promoting innovation, and improving living standards. It contributes significantly to the overall growth of the economy.

(e) What is a Small-Scale Industry (SSI)?

A Small-Scale Industry is an industrial unit where investment in plant and machinery is limited as per government norms. SSIs play a vital role in employment generation and balanced regional development.

(f) What is Business Opportunity?

A business opportunity refers to a favorable situation where an entrepreneur can introduce a product or service to meet customer needs and earn profit.

(g) Meaning of Feasibility Study

A feasibility study is an analysis conducted to determine whether a business idea is practical, profitable, and technically possible before starting a project.

(h) What is Project Report?

A project report is a detailed document that provides information about a proposed business, including objectives, investment, production process, and financial requirements.

(i) What is Innovation?

Innovation refers to introducing new products, services, or methods that improve business performance and provide competitive advantage.

(j) What is Risk in Entrepreneurship?

Risk refers to uncertainty related to finance, market conditions, production, or management that may affect business success.

SECTION – B

(Attempt any ONE – 10 marks)

(a) Growth of Small-Scale Industries (SSI) in India

Small-Scale Industries play a crucial role in India’s economic development. They contribute significantly to employment generation, especially in rural and semi-urban areas. SSIs require low capital investment and promote entrepreneurship among individuals. Government support through subsidies, training programs, and financial assistance has helped SSIs grow steadily. These industries also support large-scale industries by supplying raw materials and components.

(b) Types of Risk Involved in Entrepreneurship

Entrepreneurs face various types of risks in business. Financial risk arises due to shortage of funds or losses. Market risk occurs due to changing customer preferences and competition. Technical risk is related to failure of technology or production methods. Management risk occurs due to poor decision-making. Legal and social risks may arise due to changes in laws or social acceptance.

SECTION – C

(Attempt any ONE – 10 marks)

(a) Project Evaluation Using BCR and IRR

In this question, an initial investment of ₹1,00,000 and future cash inflows over four years are given with an interest rate of 12 percent.

The Benefit-Cost Ratio (BCR) is calculated by dividing the present value of benefits by the present value of costs. If BCR is greater than one, the project is considered viable.

The Internal Rate of Return (IRR) is the rate of interest at which the net present value of cash flows becomes zero. A project is acceptable if IRR is higher than the required rate of return.

These methods help entrepreneurs decide whether to invest in a project.

(b) District Industries Centres (DICs) and Their Functions

District Industries Centres were established to promote small-scale industries at the district level. They provide assistance to entrepreneurs in project selection, registration, finance, raw material supply, training, and marketing. DICs act as a single-window support system for new entrepreneurs.

(c) Steps to Start a Small-Scale Industry

Starting a small-scale industry involves identifying a business idea, conducting a feasibility study, preparing a project report, arranging finance, obtaining licenses, setting up infrastructure, and starting production. Proper planning and government support help ensure business success.