Northwest Community Ventures Fund

Ques1.

Solution:

The Eileen O’Brien’s for-profit avenue is a fit for GBI because of keeping the view of CSR( Corporate Social Responsibility) and to have a approach of profit maximization as well as wealth maximization keeping all shareholders at a very comfortable level.

Ques.2.

It is good to forgo economic profit to increase social returns if following cases:

a) The main objective of entity is to promote social welfare and not to earn profit;

b) The financing of the CVFs is obtained through low cost sources, subsidized sources or through government grants;

c) The expectation of investor is low i.e. investor is satisfied with lower returns;

d) The entity is able to sustain itself by fulfilling commitments towards employees and other fixed payments.

There is no precise basis of measurement of social returns i.e. we cannot assign monetary values to the social returns. However, assessment of social returns can be made through identifying:

a) Growth in per capita income;

b) Rise in general standard of living;

c) Identifying the percentage of population still operating below poverty line;

d) Growth in level of employment etc.

Ques.3. The upside i.e. positive outcomes of success of NCV for Michelle Foster are:

a) Promotions and appraisal;

b) Recognition;

c) Increased morale and confidence;

d) Increase in pay-scale.

However, she faces following professional risks:

a) Termination;

b) Strained relationship with management;

c) Lack of management support;

d) Loss of goodwill in industry;

e) Financial losses due to carrying on employment at low salary etc.

Ques.4.

Foster must put her position as follows:

a) In order to operate in long run, NCV requires to earn profit because in absence of profit, it will not be able to satisfy basic needs of an employees of growth and satisfaction which may ultimately lead to collapse of organization;

b) Secondly, it must present Eileen O’Brien the requirement of providing finance to profit...