Q.1 What is the first step in business planning?
Market Research
Raising Capital
Writing a Business Plan
Launching the Product
Explanation - Business planning begins with market research to identify customer needs, competition, and opportunities.
Correct answer is: Market Research
Q.2 Which document outlines the goals, strategies, and financial forecasts of a business?
Project Report
Feasibility Study
Business Plan
Annual Report
Explanation - A business plan defines business objectives, strategies, and expected financial outcomes.
Correct answer is: Business Plan
Q.3 What is a project formulation primarily concerned with?
Hiring Employees
Defining Objectives and Activities
Selling Products
Raising Share Capital
Explanation - Project formulation focuses on identifying objectives, activities, and resources needed for a project.
Correct answer is: Defining Objectives and Activities
Q.4 Which of the following is NOT a component of a business plan?
Executive Summary
Marketing Plan
Technical Feasibility
Employee Personal Hobbies
Explanation - A business plan includes executive summary, market and financial plans, but not employee personal hobbies.
Correct answer is: Employee Personal Hobbies
Q.5 A feasibility study evaluates:
The legal compliance only
Only the financial needs
Practical viability of a project
The number of competitors
Explanation - Feasibility studies assess economic, technical, and financial viability of a project.
Correct answer is: Practical viability of a project
Q.6 Which section of a business plan outlines the target audience and competition?
Marketing Plan
Financial Plan
Operational Plan
Executive Summary
Explanation - The marketing plan explains customer segments, positioning, and competitive landscape.
Correct answer is: Marketing Plan
Q.7 Which type of planning involves setting short-term goals and actions?
Strategic Planning
Operational Planning
Financial Planning
Long-Term Planning
Explanation - Operational planning focuses on day-to-day tasks and short-term objectives.
Correct answer is: Operational Planning
Q.8 The technical feasibility of a project refers to:
Availability of raw materials
Government approvals
Technology and resources required
Profit projections
Explanation - Technical feasibility ensures the project can be executed with available technology and resources.
Correct answer is: Technology and resources required
Q.9 Why is financial planning important in project formulation?
It predicts future employees
It shows potential losses only
It helps estimate costs and revenues
It identifies marketing strategies
Explanation - Financial planning determines capital needs, expected revenues, and profitability.
Correct answer is: It helps estimate costs and revenues
Q.10 A business plan helps entrepreneurs in:
Avoiding taxes
Securing finance
Getting personal recognition
Eliminating risks completely
Explanation - Lenders and investors often require a business plan to assess business viability.
Correct answer is: Securing finance
Q.11 Which factor is analyzed in an environmental feasibility study?
Impact on society and ecology
Amount of profits
Employee productivity
Market share only
Explanation - Environmental feasibility assesses the ecological and social effects of a project.
Correct answer is: Impact on society and ecology
Q.12 The executive summary in a business plan should:
Be longer than 20 pages
Summarize key points clearly
Include all employee details
Exclude financial data
Explanation - The executive summary highlights the most important aspects of the plan in concise form.
Correct answer is: Summarize key points clearly
Q.13 What is the purpose of SWOT analysis in business planning?
To compare salaries
To assess strengths, weaknesses, opportunities, threats
To create advertisements
To select employees
Explanation - SWOT analysis helps identify internal and external factors affecting the business.
Correct answer is: To assess strengths, weaknesses, opportunities, threats
Q.14 Which of the following is an example of a tangible resource in project planning?
Goodwill
Brand image
Raw materials
Customer loyalty
Explanation - Tangible resources are physical assets like raw materials and equipment.
Correct answer is: Raw materials
Q.15 Break-even analysis in a business plan is used to determine:
The lowest price of raw materials
The level of sales where no profit or loss occurs
The total number of employees needed
The maximum profit a firm can earn
Explanation - Break-even analysis calculates the sales volume at which total revenue equals total cost.
Correct answer is: The level of sales where no profit or loss occurs
Q.16 Which of these is NOT a function of business planning?
Risk assessment
Guiding operations
Determining personal hobbies
Attracting investors
Explanation - Business planning is about risks, operations, and financing, not personal matters.
Correct answer is: Determining personal hobbies
Q.17 The term 'project report' is synonymous with:
Balance Sheet
Business Plan
Income Statement
Bank Passbook
Explanation - Project report is another term often used to describe a business plan document.
Correct answer is: Business Plan
Q.18 Which stage comes immediately after idea generation in project formulation?
Feasibility analysis
Resource mobilization
Implementation
Sales promotion
Explanation - After generating an idea, feasibility analysis is conducted to test its practicality.
Correct answer is: Feasibility analysis
Q.19 Which part of a business plan details production methods and location?
Operational Plan
Marketing Plan
Executive Summary
Financial Plan
Explanation - The operational plan describes production, processes, and facilities.
Correct answer is: Operational Plan
Q.20 Why is risk analysis included in business planning?
To eliminate risks permanently
To identify and prepare for possible challenges
To discourage investment
To predict employee turnover
Explanation - Risk analysis helps foresee potential issues and develop contingency plans.
Correct answer is: To identify and prepare for possible challenges
Q.21 Which is an example of intangible resources in project formulation?
Machinery
Patent
Land
Cash
Explanation - Intangible resources include intellectual property such as patents and trademarks.
Correct answer is: Patent
Q.22 In project formulation, demand analysis is conducted to study:
Employee motivation
Future market potential
Government taxation
Competitors’ salaries
Explanation - Demand analysis predicts the potential demand for the proposed product or service.
Correct answer is: Future market potential
Q.23 Which part of project formulation involves securing permissions and licenses?
Financial feasibility
Legal feasibility
Operational feasibility
Technical feasibility
Explanation - Legal feasibility ensures the project complies with laws and regulations.
Correct answer is: Legal feasibility
Q.24 Which of the following best describes project appraisal?
Assessing only profits
Evaluating a project’s overall worth before implementation
Hiring skilled workers
Deciding marketing slogans
Explanation - Project appraisal determines whether a project is viable before starting.
Correct answer is: Evaluating a project’s overall worth before implementation
Q.25 Cash flow projections in business planning indicate:
Profit at the end of the year
Movement of money in and out over time
Market share percentage
Sales promotion expenses
Explanation - Cash flow projections show liquidity position and fund requirements of the business.
Correct answer is: Movement of money in and out over time