E-CELL

What factors must be considered before purchasing an NFT (Non-Fungible Token) artwork?

• Blockchain platform popularity

• Artwork's colour scheme

• Short-term value potential

•  Artwork's physical size

What's a key consideration when deciding between investing in a SIP Investment and participating in an IPO (Initial Public Offering)?

• Short-term market volatility

• Guaranteed returns in an IPO

• Historical SIP performance

• IPO subscription frequency

1. What's a potential disadvantage of seeking external funding through venture capital?

• Limited access to mentorship

• Reduced control over the company

• Lower investment returns

• Slower growth rate

1. In a high-stakes business deal, two entrepreneurs are negotiating the sale of a valuable piece of technology. To ensure a fair transaction, they decided to involve an "escrow" service. What role does the escrow service play in this scenario?

•  It guarantees immediate payment to the seller after the deal is agreed upon.

• It ensures the buyer receives the technology before any payment is made.

• It holds the funds in a secure account until both parties fulfil their obligations.

• It eliminates the need for negotiations and streamlines the transaction process.

1. Emma and Liam are excited about buying their first home. To finance the purchase, they decide to apply for a "mortgage." What does obtaining a mortgage entail in this situation?

• Paying the full cost of the house upfront to the seller.

• Renting the house for a fixed period before making a purchase decision.

• Borrowing money from a financial institution to buy the house and repaying it over time.

• Selling their current assets to raise funds for the new home purchase.

Lisa is a business owner looking to raise funds to expand her company. She considers the concept of "cost of equity" in her decision-making process. What does the term "cost of equity" refer to in Lisa's situation?

•  The total expense of maintaining the company's physical assets.

• The interest rate charged by a bank on the loan she intends to take.

• The price she paid for the shares of her company's stock.

• The return on investment required by shareholders for holding shares in her company.

David is a bank manager assessing the financial health of the loans extended by his bank. He comes across the term "NPA" while reviewing the loan portfolio. What does "NPA" or "Non-Performing Asset" signify in David's role?

•  A type of loan that has extremely high-interest rates.

• A loan given to a customer with a very low credit score.

• A loan that has not been paid back by the borrower as per the agreed terms.

• A loan secured by collateral, such as property or valuable assets.

1. Sarah is developing a new mobile app and is in the final stages before the launch. She plans to conduct both "alpha testing" and "beta testing" to ensure the app's quality. What is the primary difference between alpha testing and beta testing in Sarah's app development process?

• Alpha testing involves testing the app with a small group of end-users, while beta testing involves testing with a larger group of users.

• Alpha testing focuses on identifying technical issues and bugs, while beta testing assesses the app's usability and functionality in real-world scenarios.

• Alpha testing is conducted by the app developers themselves, while beta testing is carried out by a third-party quality assurance team.

• Alpha testing is done before the app is fully functional, while beta testing is performed after the app is launched in the app store.

1. An entrepreneur runs a small manufacturing business and is analyzing their financial performance. How can they calculate the gross margin, and why is it an important metric for their business?

• Calculate total revenue and subtract total expenses; it's crucial for setting product prices.

• Calculate total revenue and divide it by the number of products sold; it measures sales efficiency.

• Subtract the cost of goods sold (COGS) from total revenue and divide the result by total revenue; it indicates profitability after covering production costs.

  
  

• Calculate total expenses and subtract them from the net profit; it shows overall financial health.

  
  

A prospective entrepreneur is seeking a business loan to start a new venture. Explain why their personal credit score might be an important factor in the loan application process.

• It determines the maximum loan amount they can qualify for.

• It reflects their business acumen and industry knowledge.

• It helps lenders assess their history of managing financial obligations.

• It indicates their ability to generate revenue for the new business.