9609_s19_qp_23.pdf

First Nature (FN) is a co-operative farm with 20 members, producing milk, beef, and vegetables, and selling products in its shop and at local farmers' markets. The farm's mission statement is to sustainably produce food, build strong relationships with members and customers, and contribute to the local community. FN is considering purchasing a neighboring farm for $80,000 to expand its operations. The co-operative has limited capital and is exploring sources of finance. A cash flow forecast has been prepared, showing the expected cash inflows and outflows for the neighboring farm. FN is also discussing whether to allow more members or become a public limited company to employ extra workers.

Fuzz Buzz Ltd (FBL) is a small private limited company with 10 shareholders, producing handmade toys, including a popular hand-held soft spinning toy called Tommy Turner. Demand for the toy exceeds supply, and FBL is considering how to respond. The company could increase the price or supply of the toy, but this would require investment in new machinery. FBL's employees are skilled and loyal, and the company is concerned about the potential impact of increasing supply on employee morale. The Marketing Director suggests extending the product life cycle of the Tommy Turner to make the most of the current fashion.