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Moolani Foundation Case Solution

Solution Id Length Case Author Case Publisher
1065 805 Words (9 Pages) Elizabeth M.A. Grasby, Anuj Chandarana Ivey Publishing : 907B03
This solution includes: A Word File A Word File and An Excel File An Excel File

As far as the economic conditions are concerned, the Moolani foundation should not face adverse situations in any of the recipient countries. India offers the most suitable option to start a foundation as not only it is politically stable, but it has also been the recipient of international aid. On the other hand, the possibility to impart a long term benefit is also maximum for the country. The majority of the population is uneducated, and the likelihood of the success of entrepreneurial ventures is also huge. Regardless of the large population and GDP, any entrepreneurial venture will also be welcomed by the population as the country has bot witnessed huge growth in terms of technology and means of communication. However, the data also shows that both Kenya and South Africa are also viable targets for the foundation. However, the possibility of the introduction of innovative, entrepreneurial ventures is minute. Moreover, in comparison to India, the population and education level of these countries is also significant. Hence, it will be beneficial that the foundation selects India as its premier target. India is also a viable target because, in conjunction with all other factors, it offers the least amount of cost of living.

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Case Analysis for Moolani Foundation

Question# 2

The following two tables depict the monthly cash flow statements for each country.

 

The cash flows relating to the administration will be the same regardless of the country of the internship. The administration costs include the cost of scanner/fax, cost of supplies, long-distance charges, advertising and website development, and maintenance. On the other hand, the internship related cash flows contain transportation, accommodation, food, entertainment, and miscellaneous expenses. The total cash flows are largest for India as the overall cash flows amount to $14,030. The total cash flows for South Africa and Kenya are $13,380 and $12,730 respectively. The cash budget takes into account the total cash flows and the starting balance of the budget is actually equal to the total cash flows required for the next 12 months.

Question# 3

There is no doubt in the fact that the shortlisted countries (apart from South Africa) have volatile currencies as depicted in Exhibit 2 of the case. Hence, beyond any reservation, it can be stated that the currency movement of the two countries may change the cash flows to quite an extent. If the value of the Canadian dollar depreciates relative to the foreign currencies, more cash outlays will be required as now the strengthened currency of the other country will demand relatively greater CAD cash flows. On the other hand, if the value of the Canadian dollar strengthens, fewer cash flows will be required for the internships. The nature and history of the exchange rate movements also point out that currency appreciation/depreciation should be one of the leading factors/issues for Moolani.

Question# 4

The following table depicts the cash budget for the following year in which four students are expected to join the internship program.

As shown in the table, the administrative costs have remained the same. However, the internship related costs have doubled as now 4 students have joined the internship. The total cash outflows for South Africa, India and Kenya have also increased to $23430, $24730 and $22130 respectively. From the revised cash flows, it can be noted that the internship related charges constitute a major portion of the overall outflows.

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