CBSE Class 12 Sample Paper 2026 Solution for Entrepreneurship

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2026
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MARKING SCHEME
ENTREPRENEURSHIP (066)
CLASS 12 (2025-26)

Q.No. ANSWER MARKS

SECTION – A

1 D. Existing competition in the market 1

2 B. financing decisions 1

3 A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct 1
explanation of Assertion (A).

4 B. (ii) and (iii) 1

5 C. Public Limited Company 1

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

7 D. needs and problems 1

8 B. Variable Pricing Method 1

9 A. Statement 1 is true and Statement 2 is false. 1

10 D. Sales promotion 1
Note: The following question is for the Visually impaired Candidates
only, in lieu of Ans. No.10
D. To reduce production costs 1

11 B. Separate legal entity 1

12 C. buying the raw material and receiving the cash from the customer 1

13 B. a)-2, b)-1, c)-4, d)-3 1

14 C. Protect the proprietary intellectual property and then share the 1
required information.

15 A. Rent to be paid for the premises 1

16 A. (i) and (ii) 1

17 C. Determining the sales mix ratio 1

18 B. Secondary market 1

SECTION - B

19 (I) Technological environment 1

1

(II) Existing product or service. 1

20 (A) Objectives of problem identification:
• It should clearly state the problem 1x2
• Identify target group facing the problem
• Find the market acceptability of the solution to the problem (any two)
OR
20 (B) Sources of business ideas:
• Problems
• Change
• Inventions ½x4
• Competition
• Innovation (any four)

21. (I) Kripa should check Proprietary Statement given in franchise agreement. 1
(II) Another information available in the proprietary statement:
• how the franchise name is to be used, or,
• the marketing and advertising procedures in place that the franchisee 1
will be required to follow. (any one)

22. Good advertising generally elicits the following four responses:
● Attention
● Interest
● Desire ½x4
● Action

23. Fruit Price (per kg) Units sold (in Kgs) Price x Units
Apple 200 50 10,000
Mango 350 40 14,000
Water melon 300 20 6,000
Leechi 250 40 10,000
40,000 1
Unit Price = 40000/40 = ₹ 1,000 ½
Unit Cost = 60% of 1,000 = ₹ 600 ½
OR
King Size Queen Size

Sales price (in ₹) 20,000 15,000

Variable cost (in ₹) 17,000 13,000

Gross Profit 3,000 2,000
1
Sales mix ⅖ X 3,000 = 1,200 ⅗ X 2,000 = 1,200
Weighted Average Contribution Margin = 1,200 + 1,200 = 2,400 1

24. The two types of cost associated with the estimation of Economic Order
Quantity (EOQ) are:

2

● Ordering Cost 1
● Carrying Cost 1

SECTION - C

25. Factors to be considered by an entrepreneur while assessing the market:
• Demand- The demand assessment will be based on the size of
market being targeted, i.e., local markets, market at state level or
national/international market. It will also involve a study of the target
groups of consumers, their preferences, tastes and other related
variables.
• Supply and nature of competition- While assessing market, supply 1x3
position is also studied by entrepreneurs. It is the complete picture of
quantities of the product made available in the market by all the
existing players. It should take into account future supplies from
possible entrants in the field.
• Cost and price of product- It is important to determine the cost of
the product and its comparison with available products in the market.
Cost variable of competitors in terms of transportation delays,
wastage, storage etc., have to be studied to spot cost advantage. This
will influence the delivery mechanism of the identified product or
service.
• Project innovation and change- Market assessment will require a
study of prevailing innovations and changes being carried out by
existing entrepreneurs. Technological advancements in the field have
to be analysed because they may change the quality and influence
the cost and price ultimately. (any three)

26. (I) The process used by Sarah to develop her business idea is 1
Trendspotting.
It means the identification of new trends. This will help the entrepreneur to 1
understand the market and produce goods or provide services in sync with
the market trends.
(II) The way in which the trend is spotted- Think Trend. 1

27 (A) Partnership form of business overcomes the inherent limitations of sole
proprietorship:
1) Limited capital - All investments are made by the proprietor. Though, if 1
required he/she has access to loans and debts to procure funds for business
2) Limited managerial ability - What is to be done? how it is to be done? and 1
when it is to be done? All affairs are managed and controlled by the sole
proprietor.
3) Limited continuity - A sole proprietorship may face discontinuity in the 1
event of the proprietor’s death or incapacity. A partnership can continue with
the remaining partners, ensuring greater stability and continuity.
OR
27 (B) 1
3

(I) Private limited company restricts any transfer of shares but it is not
restricted in case of public limited company.
(II) Private limited company does not invite the public to subscribe for its 1
shares, debentures and public deposits, unlike public limited companies.
(III) Private limited company has a minimum paid-up capital of two lakh 1
rupees whereas it is five lakh rupees for public limited company.

28. The promotional approach that aims to engage with the targeted consumers 1
is Below-the-line approach.
This approach includes methods which are very specific, memorable 1
activities focused on targeted groups of consumers. They are under the
control of the organisation. The purpose of these activities has been to
develop the brand by creating awareness and building a brand profile.
Tools of this approach includes:
• sponsorship
• sales promotions
• public relations ½x2
• personal selling
• direct marketing (any two)

29. (I) Two Channels of Distribution used by ABC Electronics are:
• Traditional Distribution Channel (Two-Level Distribution) ½
• Direct Distribution Channel (Zero-Level Distribution) ½
(II) Two advantages of the shift in the type of distribution channel:
• Cost Reduction: By cutting out intermediaries (wholesalers and 1
retailers), ABC Electronics reduces distribution costs, allowing for
better pricing or increased profit margins.
• Improved Customer Satisfaction: The direct connection with
consumers allows ABC Electronics to better understand their needs 1
and preferences, leading to improved customer service and faster
response times.

SECTION - D

30 (A) Stages of Creative Process are:
Stage 1: Idea germination: This is the seeding stage of a new idea. It is the
stage where the entrepreneur recognises that an opportunity exists. The
idea germination takes place according to interest, curiosity of the
entrepreneur according to which opportunity is explored and exploited to its
best potential.
Stage 2: Preparation: This stage involves gathering information, identifying
problems, and setting goals. It lays the foundation by equipping the 1x5
individual with knowledge and context.
Stage 3: Incubation: During this phase, the subconscious mind processes
the information collected. This step allows for connections and ideas to form
without active effort.

4

Stage 4: Illumination: In this period of illumination the idea re-surfaces in
realistic way and entrepreneur comes out with viable plan to give practical
shape by collecting raw-material, arranging funds, policy–making for the
implementation of idea.
Stage 5: Verification: In this final stage, the idea is critically evaluated,
refined, and tested to ensure its feasibility and effectiveness.
OR
30 (B) Key elements of an operation plan that help an entrepreneur streamline the
production and manufacturing process are:
• Routing: Routing is a process concerned with determining the exact
route or path a product/ service has to follow right from raw material
till its transformation into finished product.
• Scheduling: Scheduling simply means fixation of time, day, and date
when each operation is to be commenced and completed. In general,
it’s the determination of the time that should be required to perform
each operation.
• Dispatching: The process of initiating production in accordance with 1x5
the pre-conceived production plan is said to be dispatching. This
includes issuing necessary orders instructions, guidelines and/or
information to work pertaining to giving practical shape to the
production plan.
• Follow-Up: Follow-up or expediting function relates to evaluation and
appraisal of work performed. A properly planned follow-up procedure
is helpful in dispatching errors and defects in the work.
• Inspection: Inspection is the art of comparing materials, product or
performance with established standards. This element helps the
entrepreneur to set up laboratories or evolve strategies/methods to
ensure predetermined quality of product/service.

31 (I) Format of business plan- A pitch deck with oral narrative 1
Reason- It is meant to trigger discussion and interest potential investors in
reading the written presentation, i.e. the executive summary and a few key 1
graphs showing financial trends and key decision-making benchmarks.

(II) The Business Plan is considered to be a valuable document for a start-
up such as Green Tech Solutions because it:
• helps in determining the viability of the venture in a designated
market.
• helps in guiding the entrepreneur in organizing his/her planning
activities such as identifying the resources required, working out with
legal requirements as desired by the government, enabling obtaining
of licenses if required etc. 1x3
• helps in satisfying the concerns, queries, and issues of each group of
people interested in the venture.

5

• provides room for self-assessment and self-evaluation, requiring
entrepreneurs to think through various scenarios and plan ways to
avoid obstacles.
• helps to realize the obstacles that cannot be avoided or overcome,
suggesting to terminate the venture while still on paper without
investing further time and money. (any three)

32 (I) Key features of franchising from the case are:
• The franchisee (Riya) operates under the franchisor's brand (Burger ½x2
Bliss).
• The franchise agreement includes conditions like purchasing from
approved suppliers and following the outlet's standard design.
• Royalties are paid to the franchisor based on sales revenue. (any two)

(II) Two obligations Riya has towards Burger Bliss under the franchise
agreement are:
i. Purchasing Supplies: She had to buy ingredients from approved 1
suppliers to maintain product quality.
ii. Adherence to Rules: She was required to follow the outlet's design 1
and operational guidelines.

(III) Riya’s decision was not justified because:
i. It violated the franchise agreement, which required adherence to 1
Burger Bliss’s menu standards.
ii. Such actions could harm the brand’s consistency and reputation.
However, her concerns about creative freedom could be valid, and 1
she should have sought the franchisor's approval before introducing
new items.

33 Given,
Annual Demand (D) = 2,000 units
Ordering Cost (P) = ₹ 400 per order
Holding Cost (C) = ₹10 per unit per year
Lead Time = 10 days
Daily Demand = 40 units
2PD 1
(I) Economic Order Quantity (EOQ)= √ C

2 x 400 x 2000 ½
=√ 10
= 400 units ½

(II) Re-order Level (ROL) = Lead Time (in days) × Daily Demand 1
= 10 × 40 ½
= 400 units ½

6

(III) The Re-order Level ensures that the company places an order before its 1
inventory runs out. In this case, once the inventory falls to 400 units, the
company should place a new order to avoid stockouts.

34 (A) (I) The methods of issue of shares used by the company are:
• Public issue/going public: Public issue is the most popular method of ½+1
raising capital these days by the entrepreneurs. This involves raising
of funds directly from the public through the issue of prospectus. An
enterprise organizing itself as a public limited company can raise the
required funds commonly by preparing a prospectus.
• Rights issue: Rights issue is a method of raising additional finance
from existing shareholders by offering securities to them on pro-rata ½+1
basis i.e. giving them a right to a certain number of shares in
proportion to the shares they are holding.

(II) Advantage of going public: The primary advantage an entrepreneur 1
stands to gain by going public is access to capital.
Advantage of rights issue: This method of issuing securities is considered to 1
be inexpensive as it does not require any brokers, agents, underwriters,
prospectus or enlistment, etc.
OR

34 (B) (I) Seed Capital is the term used to refer to the capital required by an 1
entrepreneur for conducting research at the pre-commercialization
stage.

(II) At the stage of Seed Funding, the entrepreneur must convince the 1
Venture Capitalist (VC) that the idea or product is worth investing in.
The investor will investigate the technical and economic feasibility of the 1
idea.

(III) Several factors influence the VC's decision to invest, including:
• Feasibility of the Idea: The VC will assess both the technical and
economic feasibility of the idea. The entrepreneur must provide a
compelling case that the product can be developed and is
economically viable.
• Prototype Development: In some cases, a prototype of the product
may be available. While it may not be fully developed or tested, the
presence of a prototype can help demonstrate the potential of the
product. 1x2
• Risk Assessment: Given the high-risk nature of investments at this
stage, VCs are cautious and may reject ideas if they do not see a
clear potential for success.
• Entrepreneur’s Capabilities: The entrepreneur’s skills, technological
expertise, and ability to match market opportunities play a crucial role
in convincing the VC of the product's feasibility. (any two)
7

8

Study Materials
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Sample Papers Class 7 Notes
Half Yearly Sample Papers Class 8 Notes

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Important Resources
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Periodic Table
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