Q1) Are the environmental conditions in Kenya, India and South Africa conducive to starting the foundation? Which of the countries provide the best long-term opportunities for the Moolani Foundation?

CountryGDP (mill. $)GDP Real Growth Rate (%)GDP Per Capita ($/person)Unemployment Rate (%)Economic Aid Recipient ($ mill.)Population (mill.)Labor Force (mill.)External Debt ($ mill.)Life Expectancy (yrs. of age)Literacy (%)

South Africa491,4003.511,1002648844.316.627,01043.2786.4

Kenya34,6802.21,1004033.811.46,79247.9985.1

India3,319,0006.23,10092,9001,080.20482.2117,20064.3559.5

Exhibit 1 Economic Conditions

For the best long-term opportunities for Moolani Foundation, we believe that India best fits the criteria of sustainable business conditions, due to better exchange rates and lowest costs of living given the GDP figures.

It is also important to note that even though the literacy rate is the lowest in India, the opportunity generated by having the highest number of institutions present to partner with.

In order to make the choice, we evaluated the factors listed in the following table and ranked the three countries for each one of them:

CountryGDPExchange RateCost of livingEmploymentMicrofinance InstitutionsLiteracyTOTAL

India32333115

Kenya1111239

South Africa23221212

3 High (Best Country)2 Medium (Better Country)

1 Low (Worst Country)

GDP and Employment: GDP factors internal consumption, government spending (economic aid) and investments (institutions).

Employment rate shows growth of the economy and a positive outlook of labor force that will help in a sustainable environment for new ventures.

Cost of Living: the lowest costs of living represents lowest cost for Moolani.

Exchange Rate: stable exchange rates equal stable currency and lower long-term risk for Moolani.

Microfinance Institutions: the presence of a large number of microfinance institutions helps Moolani to find partners.Literacy: high literacy equals less coaching resource deployment but on the other hand low literacy also provides an opportunity to tap into a new market.In a developing economy where there are many institutions and less diversification, it makes sense for institutions to partner with Moolani to create a differentiated value added.

Q2) Prepare cash budgets from September 1, 2007, to August 31, 2008, for the internships in Kenya, India and South Africa.

The lowest living costs in the first year are in India.

See submitted Excel Spreadsheet for more details (sheet Question2-4).Q3) If the value of the Canadian Dollar were to decrease relative to the foreign currencies, how would the cash flows be affected?

We are using the following assumptions:

All the administrative expenses take place within Canada (Advertising Material costs are related to the local students in Canadian schools). Canadian dollar is losing strength against Indian Rupees.

The loan from TD Bank in Canada is received in September 2007 (i.e.money upfront).

Moolani transfers cash to India only when needed (first expense in April 2008 for the rent).Hence, for Moolani the purchase of goods will become more expensive relative to before, due to the effects of the exchange rates.If the transfer of cash is executed in September 2007, Moolani can safely cover the expenses for the students in May and June. However, in this scenario they would lose the opportunity to benefit of an increase in the power of the Canadian dollar.Q4) In the second year, if four students in total were to take the internship, how do your cash budgets change, if we assume that administrative costs remain constant?

The lowest living costs in the second year are in India.

See submitted Excel Spreadsheet for more details (sheet Question2-4).Q5) As Moolani, would you proceed with the venture? If so, how much cash would you request from TD? In which months? Use your cash budgets in your answer. How would you convince TD to provide funding?

Given our analysis on our answers above, it seems logical and viable to proceed with such a venture given the current scenario.We suggest to request $ 89,565 at the beginning of year 1 (September 2007). The funding will be used to pay the living costs of the students and to invest in a partnership with a microfinance institution in India (return rate of 30%).

In order to convince TD Bank to provide funding we will show them the positive Net Present Value of the investment of $ 4,691.

The details can be found in the submitted Excel Spreadsheet 3