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Tembo Global Industries Limited – financing dilemma for the COVID-19 project

Pervin A. Gandhi (Department of Finance, P P Savani University, Surat, India)
Sujo Thomas (Amrut Mody School of Management, Ahmedabad University, Ahmedabad, India)

Publication date: 5 August 2022

Issue publication date: 21 November 2022


Research methodology

The case proposes a discussion of the time value of money and capital budgeting concepts, including determining the effective overall cost of capital, estimating working capital requirements, consideration of all relevant cash flows – including opportunity costs, finding the present value of future cash flows (annuities and lump-sum cash flows) by linking the concepts of weighted average cost of capital and working capital and net present value (NPV) and internal rate of return (IRR).

Case overview/synopsis

Jehan Wadia, a newly appointed finance manager of Tembo Global Industries Ltd., is facing a dilemma in recommending an investment decision to Mr Variava, Chief Finance Officer. Implementation of the project requires an investment of INR 82m. Ms Stella, funding division head, proposed financing through equity and term loans in the proportion of 3:2, respectively. Mr Shrinivasan, handling the short-term financial needs of the firm, suggested a finance mix having a higher weight-age of debt. Mr Variava desires to maximize the wealth by taping the opportunity. The case is written for an experience in the capital budgeting dichotomy faced by managers in real-life situations.

Complexity academic level

This case can be used in various contexts – as a preparatory case in a foundation course of Financial Management at the graduate level to instill the fundamentals for evaluating long-term investment decisions or in courses of Strategic Financial Management or Corporate Finance at the undergraduate or graduate level as a capstone case to reinforce the application of multiple concepts in strategic financial decision making.



The authors wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.Disclaimer. This case is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was compiled from published sources.


Gandhi, P.A. and Thomas, S. (2022), "Tembo Global Industries Limited – financing dilemma for the COVID-19 project", , Vol. 18 No. 6, pp. 898-912.



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