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  • Directions for question : Consultancy firm M/S McKinsey & Company was hired by the World Health Organization in 2022 and was given the

Directions for question :

Consultancy firm M/S McKinsey & Company was hired by the World Health Organization in 2022 and was given the task of evaluating the total health budgets (in million USD) of five countries namely Ghana, Egypt, Nigeria, Libya and South Africa.                    

Each of the above mentioned countries allocates its total health budget behind two parameters – healthcare budget and research and development budget. Moreover the total health budget of each country was different, and was a multiple of 50 million USD. 

The report submitted by the firm had the following points : 

i)  Among the five countries, Ghana had the lowest total health budget and also spent the lowest on healthcare. 

ii) South Africa, which had the highest total health budget and Egypt were the only countries to allocate 50% of their total health budget to healthcare. 

iii) Nigeria’s healthcare budget allocation matched with that of Egypt. Also their research and development budget allocation was double than that of Ghana's research and development budget allocation. 

iv) Libya was second to only South Africa and ahead of other countries in the total health budget as well as allocation to healthcare budget and research and development budget. 

v) Ghana's healthcare budget allocation was only 10% of the highest healthcare budget allocation amongst all the five countries which was 250 million USD. 

vi) Except Ghana's healthcare budget allocation, all other healthcare budget allocations were a multiple of 50 million USD. 

From the above report, find the answers to the questions that follow :

Question:

How much more was the research and development budget allocation of Nigeria than the same as that of Egypt (in million USD)?

 

Option: 1

50


Option: 2

250


Option: 3

100


Option: 4

75


Answers (1)

best_answer

a) From statements (ii) and (iv) we can clearly understand that South Africa has the highest allocation in Healthcare Budget as well as Research and Development Budget, and hence in Total Health Budget.

b) From statement (v) we can understand that the Healthcare Budget allocation of South Africa was 250 million USD, and Ghana’s was 10% of that, that is 25 million USD.

c) From statement ii we can also understand that South Africa allocated 50% of the Total Health Budget towards Healthcare. 

As the Healthcare Budget allocation of South Africa was 250 million USD, hence the Total Health Budget of South Africa was 500 million USD, and the Research and Development Budget was the rest 50%, that is 250 million USD.

d) From statement (ii) we also know that if Egypt’s Healthcare Budget is x million USD, then its Research and Development allocation and Total Health Budget is also x and 2x million USD respectively.

e) Also from statement (iii) we can understand that the Healthcare Budget of Nigeria is x million USD, and if Ghana’s Research and Development Budget is taken as y million USD, then the same for Nigeria will be 2y million USD. 

Hence Total Health Budget for Nigeria is (x+2y) million USD.

f) It has also been mentioned that the total health budget of each country was different, and is a multiple of 50 million USD. Now because Ghana’s Healthcare Budget allocation is 25 million USD, hence the value of Research and Development allocation of Ghana, that is y, can be only 75 million USD. It cannot be 125 million or more, because otherwise Nigeria would be allocated 2y = 250 million or more, which is not possible as only South Africa is the highest at 250 million. 

Hence Ghana’s Total Health Budget is 25+75 = 100 million USD and Nigeria’s Research and Development Budget is 75*2 = 150 million USD.

We can summarize the above conclusions as :

 

 

Healthcare Budget

Research & Development Budget

Total Health Budget

Ghana

25 million USD

75 million USD

100 million USD

Egypt 

x million USD

x million USD

2x million USD

Nigeria

x million USD

150 million USD

(x+150) million USD

Libya

 

 

 

South Africa

250 million USD

250 million USD

500 million USD

 

g) Now, if both Healthcare Budget of all (except Ghana) and Total Health Budget of all are multiples of 50 million USD, then the Research and Development Budget allocations of all (except Ghana) are bound to be also multiples of 50 million USD. 

Hence in the Research and Development Budget allocations Libya has got to have an allocation of 200 million USD (it is second in rank to South Africa and ahead of all others), and Egypt has got to have an allocation of either 100 or 50 million USD. 

But it cannot be 50 million USD, as in that case Egypt’s Total Health Budget would be 100 million, becoming equal to Ghana’s, which is not possible, as all Total Health Budgets are distinct.  

Hence x = 100 million USD.

Thus the scenario becomes :

 

 

Healthcare Budget

Research & Development Budget

Total Health Budget

Ghana

25 million USD

75 million USD

100 million USD

Egypt 

100 million USD

100 million USD

200 million USD

Nigeria

100 million USD

150 million USD

250 million USD

Libya

 

200 million USD

 

South Africa

250 million USD

250 million USD

500 million USD

h) From statement (iv) we know Libya was second to only South Africa and ahead of all others in the allocation of Healthcare Budget. From statement (vi) we know that except Ghana, all other Healthcare Budget allocations were a multiple of 50 million USD. 

Hence the Healthcare Budget allocation of Libya can only be either 200, 150 or 100 million USD.  

But 200 million is not an option as only South Africa and Egypt has 50% allocation of the Total Health Budget. 

100 million is also not an option as Libya is ahead of all others. 

Hence Libya’s Healthcare Budget allocation was 150 million USD.

Thus the final scenario is : 

 

 

Healthcare Budget

Research & Development Budget

Total Health Budget

Ghana

25 million USD

75 million USD

100 million USD

Egypt 

100 million USD

100 million USD

200 million USD

Nigeria

100 million USD

150 million USD

250 million USD

Libya

150 million USD 

200 million USD

350 million USD 

South Africa

250 million USD

250 million USD

500 million USD

Nigeria’s Research and Development Budget is 150 million USD.

Egypt’s Research and Development Budget is 100 million USD.

Hence, the research and development budget allocation of Nigeria was more than the same as that of Egypt by 

150 – 100 = 50 million USD.

 

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shivangi.shekhar

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