ENTREPRENEURSHIP (066)

CLASS XII (2024-25)

MARKING SCHEME

Q.NO. ANSWER MARKS

1. C. mutual agency 1

2. C. Problem 1

3. B. Indirect sales strategy 1

4. C. Trade Mark 1
For Visually Impaired Candidates:
A. opts to use a common or successful family name for her several products. 1

5. C. Private limited company 1

6. B. commercial value 1

7. D. (d) – (iv) 1

8. C. It does not take into account the competitor's pricing and actions 1

9. D. (i), (ii) and (iv) 1

10. C. designs or patterns used for manufacturing 1

11. D. Proprietary statements 1

12. A. Investment decision 1

13. B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the 1
correct explanation of Assertion (A).

14. A. (i) and (iii) 1

15. B. outstanding expenses 1

16. A. It is an inexpensive method of issuing shares. 1

17. C. backflip 1

18. A. increase, longer 1

1
19. An idea should lead the entrepreneur to a definite product/service which he/she
(A) can sell. So, the first step is to obtain a concept of the product or service 2
suggested by one idea. If the product is already available in the market, then
this assessment should identify the reason for re-introducing the same.
OR
19. The initial spotting of ideas i.e. basic idea is of a random nature, whereas, the
(B) development of ideas after scanning the environment i.e. post scanning idea is
2
a more purposeful activity. The former is an experiential process while the latter
is a strategic process.

20. Two elements of business opportunity are:

• Assured market scope: He is very popular in the area and people 1
generally request his employer to send Rohit for their repair and
maintenance tasks.
• Practicability of idea: He will provide services instantaneously within 15 1
minutes of the request received.

21. (I) Merger is the type of enterprise growth strategy adopted in the two 1
(A) scenarios.
(II) Two forms of the growth strategy indicated are: ½
(i) Absorption ½
(ii) Amalgamation

For Visually Impaired Candidates in lieu of 21. (A):

Opened a new branch: Internal expansion 1
Merged with protein manufacturing business: External expansion 1
OR
21. Synergy can take the following forms:
(B) • Operating synergy: The cost savings that come through economies of
scale or increased sales and profits. It leads to the overall growth of the 1
firm.
• Financial synergy: This is the result of financial factors such as lower 1
taxes, higher debt capacity or better use of idle cash.

22. The ways of trend spotting used by Zakir are:

• Watch trends: ‘Zakir decided to spend more time in the gym inside his ½+½
apartment complex and in nearby localities. He simply observed the
people.’ ½+½
• Talk trends: ‘He conducted an online survey to ascertain the viable
product for his business idea.’

23. Elevator pitch is a three-minute summary of the business plan's executive 1

summary. This is often used as a teaser to awaken the interest of potential
funders, customers, or strategic partners.
Internal operational plan is used by the management for detailed planning and 1
may not be of any interest to funders or customers.

2
24. Reorder level = Lead time x Daily requirement 1
(A) = 5 X 2500 ½
= 12500 units ½
OR
24. Net Profit after Tax
Return on Equity = 𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦 X100
(B) 6,00,000
1
= 20,00,000 x 100 ½
= 30% ½

25. Macroenvironment factors that may affect the future of Prudent Pharma are:
• ‘governed by health and safety regulations and the company needs to ½+½
acquire the required licenses - Legal factor
• ‘rising awareness levels and easy access to information of people’ - Social ½+½
factor
• ‘As income levels of the population have improved’- Economic factor ½+½

26. (I) Manpower Plan 1

(A) (II) Objective: Right person, at the right job, at right time. 1
Importance: To build up loyal, efficient and dedicated personnel, an
entrepreneur 1
needs to pay adequate and proper attention to human resource planning.
OR
(I) Marketing plan 1
26.
(B) (II) Steps in identification of the "target market" are:
(i) Deciding what the entrepreneur wishes to pursue is based on market
research or industry analysis done and complied with by competent people 1
or the entrepreneurs.
(ii) Divide the market into smaller groups based on:
• Consumer's characteristics viz. Geographic (State, Country ½
etc.) Demographic (Sex, age, etc.), Psychographics (Personality, life
style, etc.)
• Buying situations viz. Buying conditions (time available etc.),
Usage, Desired benefits (features of product). ½

27. (I) Below-the-line approach is the approach used by ‘Pom-Pom’ to reach its 1
customers.
(II) Features of Below-the-line approach are: 1
• The purpose of the activities is to develop the brand by creating
awareness and building a brand profile. 1
• It can lead to an actual sale which is easy to measure.

3
28. The following market-related considerations to be used by an entrepreneur
(A) while selecting the channel for distribution:
• Number of buyers: If the number of buyers is large then it is better to
take the services of middlemen for the distribution of the goods. On the 1
contrary, the distribution should be done by the manufacturer directly if
the number of buyers is less.
• Buying habits: A manufacturer should take the services of middlemen if 1
his/her financial position does not permit him/her to sell goods on credit
to those consumers who are in the habit of purchasing goods on credit.
• Buying quantity: It is useful for the manufacturer to rely on the services 1
of middlemen if the goods are bought in smaller quantity.
OR
28. A channel of distribution consists of three types of flows:
(B) • Downward flow of goods from producers to consumers. 1
• Upward flow of cash payments for goods from consumers to producers.
• Both downward and upward direction Flow of marketing information 1
on new products, new uses of existing products, etc from producers to
consumers. Also, flow of information in the form of feedback on the
wants, suggestions, complaints, etc from consumers/users to producers. 1

29. C= ₹ 3
P= ₹ 18
D= 7500
EOQ =√2 x P x D/ 3 1
= √2 x 7500 x 18/ 3 ½
= 300 units ½

Benefits of calculating EOQ:

Ensures that there is no stock-out situation and the cost of carrying and placing 1
the order is minimised.

30. (I) Natural 1

(II) Existing product: A business will improve or change its existing products
by modifying the ingredients or expanding the offering. This is done to keep up 1
with competition and increase sales.
Market driven: Market research provides important information to identify and
analyze the market need, market size, competition and general environment. 1
This helps in idea generation and better decision making.

(III) Socio- economic benefits are:

• Better utilisation of local resources- using locally grown bamboo which 1
was underutilised.
• Supporting environment/sustainability - provide a simple replacement for 1
harmful plastic with bamboo-based products

4
31. Advantages of franchising to franchisee:
(A) • Franchisors share market knowledge and conduct market surveys 1
• The start-ups can grow fast without having to increase labor, operating costs 1
and blocking running expenses because normally buyers straight walk up to
them.
• Franchisors provide training to franchisees that can help them to be 1
successful.
• Franchisor can support the franchisees financially, help in investing capital 1
• Franchisors use standard procedures which are tried and tested techniques
and share with franchisees. Standardization in the supplies, products and 1
services provided helps ensure that the entrepreneur will maintain quality
standards that are so important.
OR
31. (I) Penetration pricing is a pricing strategy where the price of a product is initially
(B) ½
set at a price lower than the eventual market price to attract new customers.
Skimming Pricing Strategy is used when goods are sold at higher prices so that
½
fewer sales are needed to break even.

(II) Advantages of Penetration pricing strategy:

• It can result in fast diffusion and adoption. This can achieve high market 1
rates quickly. This can take the competitors by surprise, not giving them
time to react.
• It discourages the entry of competitors. Low prices act as a barrier to 1
entry.
Advantages of Price Skimming strategy:
• Price skimming helps the company in recovering the research and
1
development costs which are associated with the development of a new
product.
• If the company caters to consumers who are quality conscious rather 1
than price conscious, then this type of strategy can work in a great way
for a company.

32. (I) Yes, as Mr. Prasad has unlimited liability. The proprietor is liable/responsible 2
for all losses arising from business. In case the business assets are insufficient
to pay off liabilities, his/her personal property can be called upon to pay his
business debts.

(II) Environment scanning is important for an entrepreneur as it helps in:

• identification of opportunities
1
• getting first mover advantage
1
• formulation of strategies and policies 1

5
33. Variety Cushion Curtains Bed covers
covers (set of two pairs) (Standard King
(per pair) size)
Selling 555 1150 1550
Price
(in ₹)
Variable 275 550 750
Cost (in ₹)
Contribution 280 600 800
Sales Mix 30% 40% 30%
Weighted 84 240 240
Contribution
(I) Total Weighted Contribution margin = 84+240+240 = ₹ 564
1
(II) Break-even quantity for each variety
Total Fixed Cost
Break Even Point = Weighted Contribution Margin 1

22,56,000
= 564 = 4,000 units ½
½
Cushion covers= 4000 x 30% = 1,200 units ½
Curtains = 4000 x 40% = 1,600 units ½
Bed covers= 4000 x 30% = 1200 units

(III) Breakeven in Rupees for cushion covers=Break even quantity x SP per unit ½
= 1200 x 555 = ₹ 6,66,000 ½

34. (I) LIC of India has approached the Primary Market. 1

(A) (II) Primary market is the ‘new issues’ market that facilitates transfer of 1
resources from the savers to the entrepreneurs.
Whereas;
Secondary market is the ‘old securities’ market that deals in buying and selling 1
of the market securities issued earlier which are sold by existing investors.
(III) Capital markets are the most important source of raising finance for the
entrepreneurs as this market can:
• Mobilize the financial resources on a nation-wide scale. 1
• Secure the required foreign capital and know-how to promote economic 1
growth at a faster rate.
OR
34. (I) Angel Investors: Informal investors in the startup in its early stages. They are 1
(B) ready to invest when even the venture capitalist are least interested to make
investments. Most angels are expected to dilute after the first few rounds of
investment.
Whereas;
Venture Capitalists: Professionally managed pool of equity capital who
undertake long-term investment, usually occurring over five years and have 1
continuous involvement in the management of business.

(II) Role of an angel investor:

• Most angels provide proactive advice, guidance, industry connections
and mentoring start-ups in its early days. 1

6
• Their objective is to create great companies by providing value creation, 1
and simultaneously helping investors realize a high return on
investments.
• They have a sharp inclination to keep abreast of current developments
in a particular business arena, mentoring another generation of
entrepreneurs by making use of their vast experience.