Entrepreneurship and Project Management
This domain tests opportunity recognition, venture design and funding, plus project selection, planning, scheduling and risk control.
Core rules
- Idea ≠ opportunity. An opportunity is attractive, durable, timely and anchored in a market need; validate with customer interviews and an MVP.
- Business model canvas: value proposition, customer segments, channels, customer relationships, revenue streams, key resources, key activities, key partners, cost structure.
- Funding: bootstrapping, angel, venture capital, debt, grants. Valuation: DCF, comparable multiples, risk-adjusted.
- Project lifecycle: initiation, planning, execution, monitoring/control, closure.
- WBS breaks scope into work packages; CPM/PERT schedule activities; critical path has zero float.
- NPV = Σ cash flow/(1+r)^t − initial outlay; accept if positive. IRR is the rate at which NPV = 0. Payback ignores time value.
- Risk register: identify, assess probability and impact, mitigate and monitor. Triple constraint: scope, time, cost (with quality).
Worked example. Outlay ₹100,000; inflows ₹40,000 for four years; discount rate 10%. Annuity factor = 3.1699, so PV = ₹126,796; NPV = ₹26,796, positive - accept. Payback = 100,000/40,000 = 2.5 years. NPV is preferred because it measures value added in absolute terms.
Traps. Sunk costs are irrelevant. A high IRR on a small project may add less value than a lower-IRR large project. PERT expected time is (O + 4M + P)/6, not a simple average. The triple constraint means changing one leg affects the others. Overvaluation destroys returns.