wr Manipal International University, Mala: REFERENCE ONLY SCHOOL OF SCIENCE & ENGINEERING JANUARY 2017 EXAMINATION Semester 3, 7 & 8: Time Allowed: 3 Hours Bachelor of Chemical Engineering (Hons) Bachelor of Mechanical Engineering (Hons) Bachelor of Civil Engineering (Hons) Bachelor of Computer Engineering (Hons) UEB 2542: ENTREPRENEURSHIP INSTRUCTIONS TO CANDIDATES: 14. Check carefully to ensure that you are sitting for the RIGHT Course and Programme. 2. This question paper consists of THREE (3) parts. Answer ALL Questions. Total marks are 100. You must answer the required number of questions only. Any additional answers will not be marked. a) Part A contains 20 questions; ALL 20 questions should be attempted. This section carries 20 marks; 1 mark for each question. b) Part B contains 10 questions; ALL 10 questions should be attempted. This section carries 10 marks, 1 mark for each question. ) Part C contains 5 questions; ALL 5 questions should be attempted. This section carries 70 marks. 3. This question paper consists of 6 pages inclu! make sure that this examination pack consists of a) An Answer Booklet - provided by the School 19 this cover page. Please check to 4, Write ALL answers in the answer booklet/booklets provided. 5, This is a closed-book examination — this means you are not permitted to use any text books or study aids in the examination 6. No electronic devices capable of storing and retrieving text, including mobile phones, electronic dictionaries and programmable calculators, may be used. 7. You should cross out any work that you do not wish to be marked uBR Reo’ uNWVERs, % 2 Entrepreneurship January 2017 MouveCONFIDENTIAL 216 ANSWER ALL QUESTIONS PART A: Multiple-Choice Questions (20 Marks) Answer all the questions below. Choose one correct answer. Write the best choice (A, B, C or D) in the answer sheet. 4. You can find out about business opportunities from. A. Books and magazines Government publications B. C. Business Associations D. Allofthe above 2. Common reasons for entrepreneurial failure include all but which one is more prominent? A) Poor Implementation B) Adequate financial support ©) Faulty product design D) Ineffective Human resource 3, Which of the following is not a purpose of a business plan? ‘A To describe the backgrounds and experience of your suppliers B_ To explain the idea behind your business C. To explain how you expect to achieve specific objectives D. To describe backgrounds experience of people running the business 4 Target market can identified by segmenting the market based on the following factor(s): ‘A. Location of target customers B. Gender C. Habits D. Production 5. Distributing pamphlets to individuals and other organizations is most closely associated with marketing mix activity of A. Pricing distribution 8. Distribution C. Promotion D. Product development 6 Marginal cost measures the of producing one additional unit of a good or service. A. Advantage B. Disadvantage Cc. Cost D. Difference Entrepreneurship january, 2017CONFIDENTIAL 36 7 10. " 12. 13. 14, ‘A firm has decided to alter its pricing in response to slower than expected job growth and deciining personal incomes. The firm is responding to changes in its. Socio-cultural environment Political environment Economic environment Competitive environment opm> The following are the steps in preparing a marketing plan EXCEPT A. Define the product concept B. Identify the target market C. Determine the market size D. Preparing purchase forecast for the business The principle task of organizing is to A, Determine who is holding what position B. Determine what job to be done, who should do it, and how the job should be managed and coordinated ©. Control workers D. Encourage workers to work hard. Which of the following business form has the most financial lability? (a) Partnership (b) Pvt Ltd (0). Proprietorship (a) Corporation Alllof the following are disadvantages of a partnership EXCEPT ‘A. Decision making must be shared among partner B. General partners are subject to unlimited liability C. Profits are shared among partners D. Multiple partners bring additional funds to the business The financial statement of the presents a summary of the assets, liabilities, and owner's equity as of a specific date is called a (n) A. Income statement B. Statement of owner's equity C. Statement of cash flows. D. Balance sheet Which one of the following assets could be described as a current asset? A. Stock of goods for resale B. Machinery to manufacture goods for resale C. Factory D. Land on which the building stand When liquidity is low, a business will most likely Have too much cash in hand A 8. Lack of stock oo UlORA, Mn Gace problems in setting short terms debts % D. Attract investors i =CONFIDENTIAL 416 15, 16 17, 18, 19, 20. capital is used to purchase a company's permanent assets ‘such as buildings, land and equipment. A. Working B. Fixed Cc. Growth D. Stable inancing is raising money by selling part of the ownership of the business to investors, A) Debt B) Equity C) Venture capitalists D) Commercial loans Your executive summary should (a) include your projections for sales, costs, and profits (b) state the amount of money you want to borrow (0) be written after the business plan is completed (d) all of the above A lender may decide not to read your entire business plan if the executive summary. (2) is too long (b)_ is too short (c) is unconvincing (d)_ does not include information from objective sources Which of the following is an example of an internal growth strategy? A. Licencing B. Merger C. New Product development D. Strategic Alliance ‘Which of the following is an example of an external growth strategy? A. Strategic alliance and joint ventures B. Improving an existing product or service C. Increasing market penetration of existing product or service D. Extending product lines. PART B: TRUE OR FALSE QUESTIONS (10 Marks) Each question carry 1 mark. indicate “True” or "False" for each statement below in the answer book. 1. Entrepreneurship According to Carl Menger, entrepreneurs are economic agents, transforming resources into products and services and gives added value One of the reasons for preparing financial plan is to ensure that the start-up capital is, sufficient for the project to take off. A business plan must be prepared first before an entrepreneur identifies its business opportunity.CONFIDENTIAL 518 4. Entrepreneurs are born and cannot be trained. 5- In forecasting sales, entrepreneurs should consider customers awareness, seasonel factors and characteristics of the business sector. 6. Equity contribution can only be in the form of cash _ Invalue based pricing, customer's perception of the value of a product becomes the key factor. Cash deficit or surplus refers to the difference between sales, for a particular period, and total expenses for the same period. 9. All business plans have different purposes, so they do not all have the same basic elements, 10. Payback analysis, return on investment, and net present value are three popular techniques for assessing cost effectiveness of the project. PART C ~ Answer ALL Questions (70 marks) QUESTION 4 a) Describe SIX main reasons people decide to become entrepreneurs. (3 marks) b) Describe THREE techniques entrepreneurs use to generate business ideas. (3 marks) ©) List FOUR common reasons, why the new product fails. (4 marks) QUESTION 2 Describe the following forms of ownership of firms with their advantages and disadvantages. (5 marksx3= 15 marks) a) Apartnership b) A private Limited company ©) A Public Limited Company. QUESTION 3 a) State objectives & uses of a business plan to an entrepreneur and financial institution. List 5 topics normally covered in a business plan (10 marks) b) What is the executive summary of a business plan? Why is it the most important part of the business plan? (6 marks) Entrepreneurship fanuary, 2017 —_gWIBRARy,CONFIDENTIAL 66 QUESTION 4 Nurul plans to create a new company to sell frozen food However, she was approached by her neighbour who intends to sell her existing business to her the business sells a Yatlely of frozen food and located near a housing area. Now Nurul hae to decide whether fhe should go ahead with her plan to create her own business or to buy the business from her neighbour |. You as her fiend, describe to Nurul the advantages and disadvantages of the two alternatives. Which of the two alternatives would you recommend to herr (5 marks) |. If Nurul decides to buy the existing business what are the five factors that she needs to consider before buying the business? (5 marks) QUESTION 5 2) Explain withthe help of example, how does an entrepreneur assess the requirements of working capital, (7 marks) ) What is Break Even point (BEP)? Explain the concept and its utility. (3 marks) ©) Calculate the Break Even sales (units) for following data. Show your calculations, Sales price/unit = RM 18; Material cosVunit = RM 8; Power! unit= RM 2: Fixed cost/month Labour = RM 22500 Fixed Overheads= RM 7500, (6 marks) END OF THE QUESTION PAPER Entrepreneurship January. 2017