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Transcription of this question: New Philanthropy Foundation (NPF)Steve Dawes founded the New Philanthmpy* Foundation (NPF) in 2005. It was set up with a verygenerous donation from a retired businessman. It is an online non-profit organization financingeducational opportunities for children in developing countries. Steve has been looking at his financialstatements with concern. NPFS cash reserves are being used up quickly and in the current pooreconomic climate, NPFS main source of finance — online donations — is falling.In 2010, NPF has no debt but also no fixed assets. NPFS outgoings are Internet usage fee,maintenance fee for servers and computers as well as a web designer’s fee for regularly updating theAWF web site.NPFhas volunteers from all over the world running the organization. An online community Of socialnetworking web sites connects them with Steve as the chief web site administrator. All funds tofinance educational projects are transferred electronically and only e-mail communication is allowed.According to its vision statement, NPF aims to become the first paperless charity.Steve has been asked by a very popular rock band to sponsor a reunion concert, which will bebroadcast only over the Internet. The opportunity would generate substantial public relationspossibilities, but some volunteers on the NPF forums are not convinced. They argue that the moneyspent sponsoring the concert should be used to provide further educational opportunities for children.They also believe that many people watching the concert may be frustrated if global Internetbroadband connections become too slow or fail.Steve is preparing a cash-flow forecast for the next six months (all figures refer to 2010) based on thefollowing figures:ForecastJuneAugustSeptemberOctoberNovemberDonations(millions Of USS)403030202010• Donations are transferred to the educational projects one month after the money has beenreceived.• Educational projects receive 95 % Of all donations.(Question I continued)Opening balance in June 2010Donations received in May 2010Internet usa e feeMaintenance fee for servers and comWeb designer’s feeConcert sponsoring feeLitersMillions of USS50I to be id in June and Se tember0.25 er month0.5 per month5 to be paid in November(a)(b)(c)Define the following terms:(i)(ii)(i)(ii)(iii)vision statementpublic relations.Using Steve’s forecast figures, prepare a cash-flow forecast for NPF fromJune to November 2010, clearly showing the opening and closing monthlycash-flow forecast balances.Comment on your results from partExplain two possible solutions to the liquidity problems highlighted inparts (i) and (ii).Analyse the impact Of two external threats on NPFS decision to sponsor theconcert.[2 marks][2 marks][6 marks][3 marks][6 marks][6 marks]

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