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MEDEC/APR 2007AETR300

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

: : : :

FUNDAMENTALS OF ENTREPRENEURSHIP ETR300 APRIL 2007 2 HOURS

INSTRUCTIONS TO CANDIDATES 1. This question paper consists of four (4) parts : PART A (20 Questions) PART B (20 Questions) PART C (3 Questions) PART D (2 Questions)

2.

Answer ALL questions from PARTS A, B and C. Answer ONE (1) question only from PART D. i) ii) iii) Answer PART A in the Objective Answer Sheet Answer PART B in the True/False Answer Sheet. Answer PART C and PART D in the Answer Booklet. Start each answer on a new page.

3.

Do not bring any material into the examination room unless permission is given by the invigilator. Please check to make sure that this examination pack consists of: i) ii) iii) iv) the Question Paper an Answer Booklet - provided by the Faculty an Objective Answer Sheet - provided by the Faculty a True/False Answer Sheet - provided by the Faculty

4.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 11 printed pages
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PART A (40 Marks) 1. Aziin is a woman entrepreneur who is involved in a retail business. Most of the time Aziin would always finds way to do things faster with fewer resources and at lower costs. Azlin's action is exhibiting her entrepreneurial competency in: A. B. C. D. E. 2. Efficiency orientation Assertiveness Systematic planning Concern for high quality High commitment to work contract

"Business activities may be divided into marketing, production, administration and finance. Every department has its own manager to supervise its activities." The most suitable type of organizational structure to describe the above is: A. B. C. D. E. Structure Structure Structure Structure Structure based on shift based on number of workers based on functions based on products based on clients

3.

The following statements are true about a private limited company, except: A. B. C. D. E. A private limited company is not allowed to offer its share to the public The liability of the share of shareholders is not limited to the amount of shares subscribed The company is required to appoint a company secretary A private limited company can initiate legal proceedings against other parties The company exists as a separate legal entity from the owner

4.

Which of the following are factors to be considered for material requirement planning? I. II. III. IV. V. A. list of material requirement machines needed to produce the product cost of materials per unit safety stocks requirement quantity of material needed based on forecasted sales I, II, III & IV

B. C. D. E.

II, III, IV & V I, III, IV & V I, II, III &V l.ll, IV&V

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5.

Which of the following is not a fixed asset? A. B. C. D. E. Van Furniture and fixtures Office supplies Land and building Machinery and equipment

6.

An entrepreneur received an order for 900 pieces of blouse, which must be delivered in 24 working days. If one tailor can sew only 8 pieces of blouse in an 8-hour working day, how many tailors does he need to recruit? A. B. C. D. E 1 2 3 4 5

7.

The followings are common factors that can be considered when analyzing the strengths and weaknesses of competitors, except: A. B. C. D. E. Size of the business Product lines Amount of marketing budget Experience in business Financial capability

8.

Which of the following statement is false for a sole proprietor business? A. B. C. D. E. It is owned by one person The business can own assets under its own name The life span of the business is not dependent upon the age of the owner The business is formed with minimum formalities It has unlimited liabilities

9.

Organizational principles can be used as a tool to organize business inputs. Which of the followings is not considered as an organizational principle? A. B. C. D. E. Authority and responsibility Delegation of authority and responsibility Unity of command Span of control Designing organizational structure

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10.

"Entrepreneurship is related to a creative destruction force that sees the destruction of usual ways of doing things by the introduction of new improved ways". This entrepreneurship concept was forwarded by . A. B. C. D. E. Richard Cantillon Adam Smith David Me Clelland Alfred Marshall Joseph Schumpeter

11.

One of the management functions is leading. Which of the following activities are involved in 'leading'? I. II. III. IV. A. B. C. D. E. assigning of jobs and responsibilities monitoring functions to ensure the activities carried out are on the right track motivating employees providing and receiving feedback from employees I & II only Ill & IV only I, II, & IV I, III & IV I, II, III & IV

12.

Which of the following statement is false regarding the importance of a financial plan? A. B. C. D. E. A financial plan assists in determining the size of investment needed to start a new business. A financial plan helps to predetermine the amount of profit the company would gain in the first three years of operations. A financial plan facilitates entrepreneurs to make sure the initial capital is sufficient for the project to take off. A financial plan allows the entrepreneur to appraise the viability of a business before actual investment is committed. A financial plan allows the entrepreneur to evaluate whether or not the project is on course.

13.

The following factors should be considered when choosing a location for a business, except: A. B. C. D. E. Availability of manpower Quality of raw materials Price of premise Availability of services such as utilities Transportation facilities

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14.

Mama Dobi will start its operation in Section 7 Shah Alam. Based on the analysis on strengths and weaknesses of the competitors, Mama Dobi is confident that it could acquire 15% share of the market size. Given the following information, calculate forecasted sales (in RM) per month for Mama Dobi.

Competitors Dobi Aman Clean & Clear Launderette Dobi Ku Top Laundry A. B. C. D. E. RM18,000 RM24.000 RM30.000 RM120,000 RM138,000

Market Share (%) 30 20 25 25

Forecasted Sales/Month RM36.000 RM24.000 RM30.000 RM30.000

15.

The cash outflow is generally made up of the following items, except: A. B. C. D. E. Collection of receivable Payment for deposits Purchase of fixed assets Miscellaneous expenses Hire purchase repayment

16.

Which one of the following is not listed as personal entrepreneurial competencies identified by McClelland and McBer & Co? A. B. C. D. E. Use of influence strategies Systematic planning Persistence Forming new ventures Sees and acts on opportunities

17.

The process of identifying, evaluating, and selecting business opportunities involves all of the followings, except: A. B. C. D. E. Selecting a business opportunity and preparing a business plan Screening the environment Screening potential employees Identifying needs and wants of the market Accessing the values of community

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18.

Which of the following is not considered as financial risks? A. B. C. D. E. Liquidity level Credit Financial Linkages Loans Foreign Exchange

19.

The introduction section of a business plan gives an overall view of the proposed business venture. Among the items that need to be covered under the 'Introduction' section include: I. II. III. IV. V. VI. A. B. C. D. E. Owner background Future prospects of the business Location Purpose of business plan Factors influencing the selection of proposed business Industry profile I, II and VI I, III, and IV II, III and IV II, IV, V and VI II, III, V and VI

20.

Which of the following statement is incorrect? A. B. C. D. E. The Trademark Act protects businesses from unhealthy business practices such as product imitation by competitors. An entrepreneur who wants to operate a food-processing factory must obtain licence from the District Health Department, Town or City Council. Entrepreneurs can apply business licence from Companies Commission of Malaysia. Workers' social needs are covered under the Employee Provident Fund Act and Workers Social and Safety Act. Manufacturing licence for manufacturing activities can be obtained from the Ministry of International Trade and Industry (MITI).

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PART B (20 Marks) 1. The main purpose of a pro-forma Balance Sheet is to help entrepreneur to analyse the financial position and performance of business.

2.

Direct material costs refer to the money spent on materials that are directly used to produce the products and services.

3. 4.

It is mandatory for employers to contribute to EPF for all qualified employees. Entrepreneur should only use primary information when preparing a business plan as secondary information is usually incorrect.

5.

Osman's father formed a sole proprietor business to operate a bookstore. His father passed away a month ago. Since this is a sole proprietor entity, Osman could just take over the business using the initial registration.

6.

There are several approaches in describing entrepreneur. Economists prefer to describe entrepreneur by viewing characteristics and behaviour possess by them.

7.

Layout based on product is designed according to the production sequence of activities to produce the product.

8.

In financial planning, hire purchase of motor vehicle is considered as a use of fund.

9.

A small-sized business is defined as a business that employs not more than 150 full time workers and an annual sales not exceeding RM25 million.

10.

Psychographic segmentation means grouping the customers preferences and lifestyles for marketing planning.

based on their

11.

Utilities cost is considered as indirect costs incurred in the manufacturing business.

12.

Assuming ownership of ventures can be used as a factor to differentiate between entrepreneur and intrapreneur.

13.

Jobs specification outlines the designation and responsibilities of an employee.

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14.

Current assets are those that are easily converted into cash.

15.

Every private limited company is required to display clearly the words "Registered Office" at the official registered office premise and failure to do is an offence.

16.

The level of risk encountered by entrepreneur would depend on the ease of entry, the amount of capital invested and the expected returns from the venture.

17.

Man productive hours should be considered when purchasing machinery.

18.

A competitor based pricing is a technique to set price based on the perceived value of products or services by the competitors' customers.

19.

The maximum number of shareholders for a private limited company is limited to 50 persons at any given time.

20.

Individual who is willing to make personal sacrifice and put extra ordinary effort to complete a job for customers is demonstrating personal entrepreneurial competencies known as initiatives.

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PART C (15 Marks) QUESTION 1 Explain with examples how the foiiowings could create business opportunities: a) b) c) Industrial linkages Changes in population structure Government regulation (5 marks)

QUESTION 2 Elaborate the differences between a partnership business and a private limited company. (5 marks)

QUESTION 3 There are certain characteristics that would differentiate a small business from large corporations. Identify and explain these characteristics. (5 marks)

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PART D (25 Marks) QUESTION 1 Mat Awi who is newly involved in entrepreneurship, wishes to venture into a '1901 franchise business' selling hotdogs and beverages. He understands that he would have to prepare a business plan before starting the business. Mat Awi realizes that he has limited experience in writing a business plan. He knows that you had enrolled in ETR300 course and has some knowledge in preparing a business plan. Thus, Mat Awi decides to approach you to seek for your consultation. You are required to:

a)

List for Mat Awi, four (4) necessary business inputs that are related to his business. (4 marks)

b)

Explain the meaning of sale forecast to Mat Awi. (3 marks)

c)

Elaborate to Mat Awi the factors that he should consider when forecasting sales. (9 marks)

d)

Describe to Mat Awi the marketing expenditure that would incur in his marketing budget plan. You would also have to assist him by providing appropriate examples of items classified as marketing expenses. (9 marks)

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QUESTION 2 Fadli is a young graduate from Universiti Teknologi MARA. Since in primary school, Fadli had an ambition that he would choose entrepreneurship as his career. After finishing his study, Fadli is seriously considering to involve in a business that process fish fingers. As an initial preparation for this venture, Fadli has enrolled into the Graduate Enterprise Programme conducted by the Ministry of Entrepreneurship and Cooperative Development. One of the lessons he learnt in the programme is that entrepreneur should prepare a business plan before venturing into the business. During the programme, Fadli had been exposed to the various support systems that assist entrepreneurs in their ventures.

a)

Give four reasons why it is important for Fadli to prepare a business plan. (8 marks)

b)

Identify four business support assistance that are provided by the Government and private agencies to help Fadli to start his new business. Name any two agencies to support your answer. (12 marks)

c)

In the business plan, Fadli has to prepare the project implementation cost. List the components of project implementation cost. (5 marks)

END OF QUESTION PAPER

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