Communication Activity CT9 A Service. In order to better serve deeir rual patieats, Dra. Hos ead Jun Zhatg (trothera) began givieg sufecy seminars. Especially popalar weie their "emergency.pregaredness"' talls given to farmers. Masy people asked whether the "kir" of materials the doctors seconmended for common farm emergencies was commercially available. After checking with several suppliers, the doctoos reatized that to oher compary offered the sapplies they recommended in their seminass, packaged in the way they described. Their wives, Tian and Qing. agrood bo make a test puckage by orderiag supplies from varioes modical supply companies and assenbling them into a "kir" that could be sold at the seminan. Whes these kits proved a runany taccess, the sisters-in-law decided to market them. Ac the advice of their acoountaet, they organited this venture as a separate compery, called Life Protection Prodects (L.PF), with Tian Zhang as CEO and Qing Zhang a Secretary.Treasurer. LPP soon started receiving requess for the kis from all over the coutary, as word spead about theit availubility, Even without advertiting, LPP wat able to sell its full inverniory every month. However, the company was beceming firancially strained. Tian and Qing had about HKE51,000,000 in movirgs, and they invested about half that amount initially. They believed that this renture would allow them to make mooty. However, at the present time, only about HKS300,000 of the cash remains, and the eonpary is consanty hhort of cash. Than hat como to you for adviee. She doet not understand wiy the company is having eath fow probleme. She and Qing have not even been withdraming talarits. However, they have rented a boekl beilding and have hired two more fall-time woekers to belp them cope with the increasing demand. They. do ate thiak they could handle the demand without thir additional help. Tian it also worried that the cash problems meas that the coerpany may not be able to noppor itself. She has prepared the cash budget that follow. Al aciaiat cuasomen pay for their podoct in full at the time of parchase. In addition, sevetal large companies have ordered the kits for ase b5 employees who work in remoet sivel. They have requesiod credil verns and have been allowed pay in the month following the sale. These large purchsiers ameunt to about 25 er of the sales a1 th present time. LPP purchasts the materials for the kits about 2 months abead of time. Tas and C are considering stowing the growth of the compacy by simpty purchating lets materials, which m/ mess selling fower kitt. The workers art paid weekly. Tian and Qiag need about HKS150,000 cash on hand at the bepint of the manth to pay for purchases of raw maberials. Right now they have been using cssh from their ings, bur as noted, oaly HK $300,000 is left. Instructions Wrice a reiponse 15 Tut Zhang, Expiain why UPP in aboet of caih. Wall this eompany be alte to suppee: itself? Explain your answer Make any recommendetiom jou doem appropriate
