CBSE Class 12 Question Paper 2026 Solution Entrepreneurship

FOR CBSE CLASS 12 EXAM PREPARATION

CBSE Class 12
2026
Question Paper
Solution ·
Entrepreneurship
EXAM YEAR TYPE

CBSE Class 12 2026 Question Paper Solution
SUBJECT

Entrepreneurship

Notes · Sample Papers · Previous Year Papers · Mock Tests

Marking Scheme
Strictly Confidential
(For Internal and Restricted use only)

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Senior Secondary School Examination, 2026

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ENTREPRENEURSHIP (066)(PAPER CODE 98)

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General Instructions: -
s e
s e g l aof the
g lAasmall mistake in evaluation may lead to serious problems which may affect thea future of
1 You are aware that evaluation is the most important process in the actual and correct assessment
a education system and teaching profession. To avoid mistakes, it is requested that
candidates.
the candidates,
before starting evaluation, you must read and understand the spot evaluation guidelines carefully.
2 “Evaluation policy is a confidential policy as it is related to the confidentiality of the
examinations conducted, Evaluation done and several other aspects. Its’ leakage to public in any
manner could lead to derailment of the examination system and affect the life and future of
millions of candidates. Sharing this policy/document to anyone, publishing in any magazine and
printing in News Paper/Website etc may invite action under various rules of the Board and
BNS.”
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3 Evaluation is to be done as per instructions provided in the Marking Scheme. It should not be done
according to one’s own interpretation or any other consideration. Marking Scheme should be strictly
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adhered to and religiously followed. However, while evaluating, answers which are based on latest

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information or knowledge and/or are innovative, they may be assessed for their correctness
a
otherwise and due marks be awarded to them. In class-X, while evaluating two competency-
based questions, please try to understand given answer and even if reply is not from marking
scheme but correct competency is enumerated by the candidate, due marks should be awarded.
4 The Marking scheme carries only suggested value points for the answers. These are in the nature
of Guidelines only and do not constitute the complete answer. The students can have their own
expression and if the expression is correct, the due marks should be awarded accordingly.
5 The Head-Examiner must go through the first five answer books evaluated by each evaluator on the
first day, to ensure that evaluation has been carried out as per the instructions given in the Marking
Scheme. If there is any variation, the same should be zero after deliberation and discussion. The
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remaining answer books meant for evaluation shall be given only after ensuring that there is no
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significant variation in the marking of individual evaluators.
6 Evaluators will mark ( √ ) wherever answer is correct. For wrong answer CROSS ‘X” be s e m
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marked. Evaluators will not put right (✓) while evaluating which gives an impression that
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answer is correct and no marks are awarded. This is most common mistake which evaluators are
committing.

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7 If a question has parts, please award marks on the right-hand side for each part. Marks awarded
for different parts of the question should then be totaled up and written in the left-hand margin
and encircled. This may be followed strictly.
8 If a question does not have any parts, marks must be awarded in the left-hand margin and
encircled. This may also be followed strictly.
9 If a student has attempted an extra question, answer of the question deserving more marks
should be retained and the other answer scored out with a note “Extra Question”.
10 No marks to be deducted for the cumulative effect of an error. It should be penalized only once.
11 A full scale of marks 70 has to be used. Please do not hesitate to award full marks if the answer
deserves it.
12 Every examiner has to necessarily do evaluation work for full working hours i.e., 8 hours every
day and evaluate 20 answer books per day in main subjects and 25 answer books per day in
other subjects (Details are given in Spot Guidelines). This is in view of the reduced syllabus
and number of questions in question paper.
13 Ensure that you do not make the following common types of errors committed by the Examiner
in the past: -
● Leaving answer or part thereof unassessed in an answer book.
● Giving more marks for an answer than assigned to it.
● Wrong totaling of marks awarded on an answer.
● Wrong transfer of marks from the inside pages of the answer book to the title page.
● Wrong question wise totaling on the title page.
● Wrong totaling of marks of the two columns on the title page.
● Wrong grand total.
● Marks in words and figures not tallying/not same.
● Wrong transfer of marks from the answer book to online award list.
● Answers marked as correct, but marks not awarded. (Ensure that the right tick mark is
correctly and clearly indicated. It should merely be a line. Same is with the X for incorrect
answer.)
● Half or a part of answer marked correct and the rest as wrong, but no marks awarded.
14 While evaluating the answer books if the answer is found to be totally incorrect, it should be
marked as cross (X) and awarded zero (0) Marks.
15 Any un assessed portion, non-carrying over of marks to the title page, or totaling error detected
by the candidate shall damage the prestige of all the personnel engaged in the evaluation work
as also of the Board. Hence, in order to uphold the prestige of all concerned, it is again reiterated
that the instructions be followed meticulously and judiciously.
16 The Examiners should acquaint themselves with the guidelines given in the “Guidelines for
spot Evaluation” before starting the actual evaluation.
17 Every Examiner shall also ensure that all the answers are evaluated, marks carried over to the
title page, correctly totaled and written in figures and words.
18 The candidates are entitled to obtain photocopy of the Answer Book on request on payment of
the prescribed processing fee. All Examiners/Additional Head Examiners/Head Examiners are
once again reminded that they must ensure that evaluation is carried out strictly as per value
points for each answer as given in the Marking Scheme.

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Set 4

MARKING SCHEME

Subject: ENTREPRENEURSHIP (066)
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s e SECTION A
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a
Answers Marks

1 (C) Scheduling 1

2 (A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct 1
explanation of Assertion (A)
3 (B) Economic environment 1

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4 (B) (i), (iv), (ii), (iii), (v) 1

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5 (B) Description of venture/business venture 1

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6 (D) companies in the same industry
g l a 1

7
a 1
(B) Opportunity spotting by analysing the needs and problems that exist in the
environment
8 (A) for a limited duration to recover most of the investment made to build the 1
product
9 (C) One-level channel 1

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For Visually Impaired Candidates

c. o (A) Three-level channel s e m 1
m 10 (B) Reverse acquisition a
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11 (C) Commercial Application 1

12 (C) Short-term loans 1

13 (B) the length of time between a firm’s purchase of inventory and the receipt 1
of cash from accounts receivable is 45 days.

14 (B) (1)-(c), (2)-(d), (3)-(a), (4)-(b) 1

15 (B) Paperwork for placing order 1

16 (C) Private Placement 1

17 (D) Safety Stock 1

18 (B) It can be used for businesses to grow through acquisitions. 1

Section B
19 The format of Business plan is: An Internal Operational Plan (1 mark 2
for
A detailed plan, describing planning details that are needed by management but identificat
may not be of interest to external stakeholders. ion and 1
mark for
explanati
on )

20 (i) Preparation: On the basis of the idea, interest and curiosity, the need is adjudged 1 2
(a) by the entrepreneur and he starts looking for the answer to implement the idea. If the
idea is to launch a new product or service then market research is conducted. That
happens because the seed of curiosity has taken form of an idea, the entrepreneurs
foresee the future of the product. +

(ii) Verification: Also called the validation or testing stage. This is where the idea is 1
verified to prove that it has value. This is the most difficult phase of creativity as
obstacles begin to appear. This is the developing stage in which knowledge is developed
into application.

OR

20 Two steps after ‘Product identification’ are: (½ mark 2
(b) (i) Application and use
Ideas should be examined for their real life use and application. If it already exists in for
the market, we will have to find out its present use, then we may think of modifying it identificat
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for better use. ion and ½
mark for
(ii) Level of operation explanati
This is a crucial test for product/service identification. Depending on the use of the on )
product/service the entrepreneur will produce it in a cottage industry or a small scale– 1 × 2= 2
industry or a large–scale industry.

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c. ointo with the franchisor.
21 Contract Explanation – This section of the agreement outlines the type of relationship
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2
s
a franchisee is entering

Operations s em – This section of the agreement details the guidelines that the +
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franchisee amust legally follow in operating the business as outlined by the franchisor.
Manual
1 a
22 Publica relations-It is a deliberate, planned and sustained effort to establish and
(a) maintain mutual understanding between an organisation (or individual) and its (or their)
2 2
public. It is about building good relations with the stakeholders (public) of the business
by obtaining favourable publicity, building a good corporate image and handling or
heading off unfavourable rumours, stories and events.

OR
2 2
(B) Business Promotions
22
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(b)
For visually impaired candidates
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(D) Sales force promotions
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23 ag
𝟐𝑷𝑫 1 mark 2
(a) Economic order quantity = √ 𝑪 for
P = Cost of placing and receiving one order formula
D = Annual demand for the item
C = Inventory carrying/holding cost per unit
P = ₹50 +
D = 2500 units
C = ₹25
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m Economic order quantity = √ c. o½ mark
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2×50×2500
25
s e for

s em l a calculati
=√10000
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+
½ mark
for final
Economic order quantity = 100 Bluetooth speakers/ Units
answer

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OR

23 Return on Equity = 𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 x 100
𝐸𝑞𝑢𝑖𝑡𝑦 ½ mark 2
(b)
(Net Income = Net Profit – Interest on loan for
= 50,000 – 2,500 formula
= ₹47,500 +
47,500
= x 100 ½ for
2,50,000
= 19% final
answer=
1
Alternate Solution to Return on Equity
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Return on Equity = x 100
𝐸𝑞𝑢𝑖𝑡𝑦

50,000
= x 100
2,50,000
= 20%

(Marks will be awarded if the candidate has solved by any of the above two
methods)

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡
Return on Investment = x 100 ½ mark
𝑇𝑜𝑡𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑒𝑑
for
50,000 formula
= x 100
2,50,000
+
= 20% ½ for
final
answer=
1
1+1=2
24 Two rules considered by ‘Swadisht’ online food delivery platform while
planning to launch it’s advertising activity are: 2

(i) Aim (½ mark
To decide what is the primary purpose of the advertisement – whether it is to for
inform, sell, produce listings or to improve the image of business. identificat
ion and ½
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(ii) Target mark for
To decide who the target customers are and from which sector of the public are explanati
we trying to achieve a response – whether it is male, female, adult, teenager, on )
child, mother, father etc.? 1 × 2= 2

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Section C

25 Two idea fieldsm
. (½ mark 3 s
(i) Market s e Demand driven idea
discussed in the case are:
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driven/ for
g
a“She decided to study the market to understand the trends of demand, ion + ½
Quote: identificat

supply and consumer preferences” for
quoting
- Market research is any organized effort to gather information about + ½ mark
target markets or customers. for
(ii) Natural Resources explanati
Quote: on )
“Reena decided to start a business of producing ready-to-drink bottled 1½ × 2=

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juices extracted from the locally grown organic citrus and other fruits” 3

- Ideas can be generated based onm
c
. resources. A product or
s e forest resources, agriculture,
natural
service may be derived from
horticulture, mineral, animal
g a
l husbandry, wind, sun and human
resources. a
26 Two ways of trend spotting used by Kavita are: 3
(½ mark
(i) Watch Trends for
In this an entrepreneur regularly spends time in watching and observing what their target identificat
customers are eating, doing, wearing and using. ion + ½
Quote: “She makes it a point to go to her restaurant regularly as well as other restaurants for
and spends time watching and observing what people are eating, wearing and doing”. quoting
+ ½ mark
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(ii) Talk Trends

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for
Talking to people is an important trend-spotting tactic. The entrepreneur talks to existing
m explanati

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and prospective customers, both online and offline to get inputs on what customers are
e
on )
s and 3
thinking, buying, craving and doing.
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se Quote: “She also talks to the customers to get inputs on what they are lthinking
buying” ag

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27 While assessing the market, an entrepreneur has to prepare details based on the (½ mark 3
(a) following factors: for
(i) Demand heading +
The demand assessment will be based on the size of market being targeted, i.e., local 1 mark for
markets, market at state level or national/international market. It will also involve a explanatio
study of the target groups of consumers, their preferences, tastes and other related n)
variables. 1½ × 2= 3
(ii) Supply and nature of competition
While assessing the market, supply position is also studied by entrepreneurs. It will give
a complete picture of quantities of the product made available in the market by all the
existing players. It should also take into account future supplies from possible entrants
in the field.
(iii) 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.
(iv) 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 two factors)
OR
(½x6 = 3)
27 Reasons why a private company is preferred: 3
(b) (i) Only two members are required to form a private company.
(ii) Only two directors are required to constitute the quorum to validate the proceedings
of the meetings.
(iii) Such company can file a statement in lieu of prospectus with the Registrar of
Companies.
(iv) It can commence its business immediately after incorporation.
(v) Holding of a statutory meeting or filing of a statutory report is required by a private
company.
(vi) A non-member cannot inspect the copies of the Profit and Loss A/c filed with the
Registrar.
(vii) Limit on payment of maximum managerial remuneration does not apply to a
private company.
(viii) Restrictions on appointment and reappointment of managing director do not apply.
(ix) Maintaining of index of members is not required by a private company.
(x) Directors of the private company need not have qualification shares.

(Any six reasons)

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28 Sales strategy consists of a plan that positions a company’s brand or product to gain a 1 3
(a) competitive advantage. +
Types Of Sales Strategies

(i) Direct sales strategy
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In this strategy sales people attack the competition head on when talking to
the customer. They talk about each feature of the competitor’s product and
(½ for
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compare it to theirs. It is also known as ‘negative selling’
heading +
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(ii) Indirect sales strategy
½ for
explanati ag
ag This sales strategy applies more subtle techniques by demonstrating features
and benefits not available with the competitor’s products or services without
on)
1×2=2
even mentioning them by name. This is positive sales strategy.

OR

28 Promotion as a ‘promotion strategy’ is a method which spreads the word about the
1 3
(b) product or service to customers, stakeholders and the broader public.
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+
Types of Promotion strategies

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(i) Above-the-line
l as (½ for
heading +
g
This promotion uses mass media methods and focuses on advertising to a large
a
audience. It includes conventional media like print, online, television, billboard,
½ for
explanati
and cinema advertising.
on)
(ii) Below-the-line
1×2=2
These methods are very specific, memorable activities focused on targeted
groups of consumers. The purpose of these activities is to develop the brand by
creating awareness and building a brand profile through sponsorship, sales
promotions, public relations, personal selling and direct marketing.

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(iii) Through-the-line

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This refers to an advertising strategy involving both above-and below-the line

m communications in which one form of advertising points the target to another
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form of advertising thereby crossing the "line".

(Any two strategies)

29 (a) Variable Price method (1 Mark 3
for
Variable pricing is a marketing approach that permits different rates to be extended to
different customers for the same goods or services.
identific
ation + 1
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mark for
(b) In real estate market the prospective buyers often submit bids for properties that explanati
are less than the posted asking price, in the hope that the seller will accept a smaller on {for
amount. This often leads to a series of offers and counter offers that sometimes part a}+
result in a sale taking place. At other times, the two parties are unable to come to 1 mark
terms, and no sale takes place.
{for Part
(b)}
SECTION D
30 Five elements of an operational plan (½ mark 5
(i) Routing for
(a) Routing is a process concerned with determining exact route or path a product/ service heading +
has to follow right from raw material till its transformation into finished product. ½ mark
for
(ii) Scheduling
Scheduling means fixation of time, day, date when each operation is to be commenced
explanati
and completed. It is the determination of the time that should be required to perform on)
each operation. 1×5=5

(iii) Dispatching
The process of initiating production in accordance with pre-conceived production plan
is known as dispatching. This includes issuing necessary orders instructions, guidelines
and/or information to work pertaining to give a practical shape to the production plan.

(iv) Follow-Up
Follow-up or expediting function relates to evaluation and appraisal of work
performed. A properly planned follow-up procedure is helpful in detecting errors and
defects in the work.

(v) Inspection
Inspection is the art of comparing materials, product or performance with established
standards. It helps the entrepreneur to set up laboratories or evolve strategies/methods
to ensure predetermined quality of product/service.

(vi) Shipping
This section goes beyond the manufacturing process and describes the flow of goods /
services from production to the consumers.
(Any five elements)

OR

30 First five steps in the process of preparing the marketing plan are as follows: 5
(b) (i) Business situation analysis:
The first step in a marketing plan answers: “Where have we been?” (½ mark
It usually reviews past performance and achievements of the enterprise but for a new for
venture, the focus shifts towards:
heading +
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* Entrepreneur’s personal profile ½ mark
* Product development details for
* Need the product/service satisfies explanati
* Entrepreneur’s prior experience on)
* Planned market segmentation
1×5=5

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(ii) Identify the target market:

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The second step is essential for any new venture as it helps to define clearly the specific

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group of potential customers whose needs the enterprise aims to fulfill.
s e
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This identification of the "target market" is pretty tedious task as it involves:
g la
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a) The entrepreneur can decide which market/industry he wishes to pursue. He/she can
g a
a
decide this on the basis of market research or industry analysis.
b) Divide the market into smaller groups based on:
i) Consumer's characteristics viz. • Geographic (State, Country etc.) • Demographic
(Sex, age, etc.) • Psychographics (Personality, life style, etc.)
ii) Buying situations viz. • Buying conditions (time available etc.) • Usage • Desired
benefits (features of product)
c) Select segment or segments to target.
d) Develop a marketing plan integrating according to product, price, distribution,
promotion.

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(iii) Conduct SWOT analysis:

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Third step is very important for an entrepreneur as he has to consider his target market
with respect to:
s e
l a
a) Strengths b) Weaknesses c) Opportunities d) Threats
g
a
This will ensure success of the new firm.

(iv)Establish goals:
Fourth step answers the question as to where the enterprise wants to go. They have to
look into detail the following for the same:
a) realistic, attainable and well-defined goals and objectives for the enterprises,
b) quantifying the goals so that they could be measured for control purposes.
c) setting standards to measure those goals which are qualitative in nature.
d) limiting the goals to a specific number so that there are no chaos, confusions or
overlapping. Otherwise, even controlling and monitoring will be difficult.
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(v) Define marketing strategy:

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Fifth step deals with "How do we get there?". This demands specific activities to be
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outlined to meet the enterprise's established goals and objectives.
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The marketing strategy and action plan comprise of decisions pertaining to the
following 4 P’s: a) Product b) Price c) Promotion d) Place
31 (a) The forms of business organisation highlighted in the case are- Sole proprietorship ½ mark 5
and Partnership. each for
identificati
(b) Features of Sole proprietorship on of the
(i) Sole proprietorship has individual ownership. two forms
(ii) This business has individual management and control by the sole proprietor. ½ × 2 =1
(iii) The proprietor takes care of financing, individually.
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(iv) There is no separate legal entity in sole proprietorship business. +
(v) The proprietor has unlimited liability. (½ mark
(vi)The sole proprietor is the sole beneficiary of all profits and losses of business. each for
(vii) This form of business enjoys easy formation and closure. any four
(viii) This form of business generally has a limited area of operation. features of
(Any 4 features) sole
proprietors
(b) Features of Partnership hip)
(i) There must be at least two or more persons to enter into a contract to form
½×4=2
partnership.
(ii) The relation of partnership arises from an agreement/ contract.
(iii) The objective of the business is to make profits and distribute the same +
amongst partners.
(iv) The liability of partners in a partnership firm is unlimited.
(v) There is an implied authority that any partner can act on behalf of the firm. (½ mark
(vi) There is mutual agency among partners where the business can be carried on by each for
all the partners or any one of them acting for all. any four
(vii) Every partner is supposed to act in utmost good faith. features of
(viii) There is restriction on transfer of shares by any partner. partnershi
(ix) There is continuity in the partnership up to the time that all partners desire to p)
continue it. ½×4=2
(Any 4 features)
32 Three advantages of franchising to Reena (½ mark 5
for
(i) Product acceptance heading +
The franchisee operates under an established brand name with recognised products or ½ mark
services. This reduces the effort and cost required to build credibility, as customer for
trust and brand reputation already exist. It also helps attract customers quickly, as the explanati
brand already has a market presence and goodwill.
on)
1×5=5
(ii) Management expertise
The franchisor provides training and ongoing support in areas such as operations,
marketing, accounting, and management. This guidance helps the franchisee run the
business more effectively and reduces the chances of operational mistakes.
Continuous assistance also supports business growth and problem-solving.

(iii) Knowledge of the market
Franchisors offer industry experience and market insights, including information
about target customers, competition, and effective business strategies. Their
established systems and research help the franchisee adapt to local market conditions
and improve decision-making.

Two disadvantages of franchising to Reena

(i) Right and the only way of doing things
Entering into a franchise contract limits the degree of freedom for the franchise. As
such, one gets an over guided and over influenced degree of control exerted by the

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franchisor. This results in losing the freedom to innovate to some extent.

(ii) Continuing costs implications
Apart from the initial franchise fee, the franchisee must pay ongoing royalties and
other charges, making it a costly arrangement. These recurring payments may reduce
profit margins and financial flexibility.

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33 Product
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Selling price per unit (₹)
e
200 150 1 mark for

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Variable cost per unit (₹) 120 90 calculating
ag
contribution
g
Contribution margin per 80 60
unit
a
Sales Mix % 40% 60%
margin per
unit
40 60 +
80 x 100 = 32 60 x 100 = 36

1 mark for
Weighted-average contribution margin per unit = 32 + 36 calculating
WACM
=₹ 68 +

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Total Fixed Cost ½ mark for
Overall Break-even point = Weighted average contribution margin per unit
m
BEP
1,15,600
s e formula
= 68
g l a +

a
= 1700 units. ½ mark for
overall BEP
Product wise Break-even point in units
+
Break-even point of Chocolate Cake = 1700 x 40% = 680 units 1 mark for
BEP in
Break-even point of Vanilla Cake = 1700 x 60% = 1020 units units for
individual
products
+
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m Product units at break-even 680 x 200 1020 x 150
c. o1 mark for
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point x selling price per unit

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se
Product wise BEP in rupees ₹ 1,36,000 ₹ 1,53,000
l a
Total BEP in ₹ = 2,89,000
ag

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34 A capital market may be defined as an organized mechanism meant for effective and 1 mark for 5
(a) smooth transfer of money capital or financial resources from the investors to the defining
entrepreneurs. capital
market
+
1 mark
Capital markets are crucial for entrepreneurs because they: each for
a) Mobilize financial resources on a nation-wide scale. three
b) Secure foreign capital and know-how. importance
c) Ensure effective allocation of resources by directing funds to projects with the of capital
highest potential yield or to underdeveloped priority areas. market
(3×1=3)
+

Financial Intermediation 1 mark for
The process of transferring financial resources from the surplus units to the deficit meaning of
units is referred to as "Financial Intermediation". financial
intermediati
on

OR

34 Venture capital is a type of private equity capital provided as seed funding to early- 1 mark for 5
stage, high potential, high risk, growth up companies/ entrepreneurs who lack the
(b) definition
necessary experience and funds to give shape to their ideas.
Or (any of the
two)
Venture capital is an equity based investment in a growth-oriented small to medium
business to enable the investors to accomplish objectives, in return for minority
shareholding in the business or the irrevocable right to acquire.
+
Early-stage financing

Early-stage financing includes: (a) Seed capital (b) Start-up finance (c) Second-round
financing.

a) Seed capital finance:
Capital provided at the pre-commercialisation stage for research and initial 1 mark
development of an idea or prototype. The venture capitalist (VC) evaluates the each for
technical and economic feasibility of the idea. Risk is very high, so the entrepreneur three stages
must demonstrate strong capability and market potential. of early-
stage
b) Start-up finance: financing
(1×3=3)
Funding is provided once the idea qualifies for further investment. The entrepreneur
presents a business plan to the VC, develops the product/prototype, and establishes the
organisation and management team.

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c) Second-round financing:
Provided when the product is already being produced and sold. Funds are used for
expansion, modernisation, or diversification to achieve growth and stability. Larger
investment is involved, so proven performance and market competitiveness are
essential.
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Last stage financing / Bridge / Pre-public stage:

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This is the final stage of venture capital financing, with the main objective to prepare
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1 mark for
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the venture to go public so that investors can exit with profits. At this stage, the
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business has already achieved a certain amount of market share and now needs funds financing
for expansion, mergers, strengthening market position, and preparing for public issue.
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