Hard to tell exactly what is going on without seeing some other code, but it looks like $mbaentrepreneurshipsettings is a string:
$mbaentrepreneurshipsettings = get_string('mbaentrepreneurshipsettings', 'local_mbaentrepreneurship');
My guess is that when you hit index.php that make_active() code isn't even getting called. Also thinking that what is meant for that line is this:
That uses the navigation_node rather than the string, which is the object with the make_active method.