QUESTION 2

Ava Green, a prominent figure in Perth’s renewable energy sector, is on the brink of a breakthrough in solar panel technology. Her innovative approach involves integrating organic materials to improve efficiency in energy capture and storage. Ava is confident that her invention could revolutionise the solar energy market, particularly for residential uses. Recognising the potential, Ava realises that significant development is still required to turn her concept into a market-ready product.

To fund this ambitious project, she plans to secure a loan from a local financial institution. Ava’s son, Ethan Green, is an emerging talent in Material Science, currently undertaking his PhD in the field. His expertise in organic materials has been crucial in refining the technology behind Ava’s solar panels. Ava envisions establishing a business not only to advance her retirement plans but also to build a financial legacy for Ethan and her daughter, Isla. Her goal is to reinvest the business profits into ongoing research and occasionally transfer some funds to her children’s accounts as needed.

Ethan, who is deeply engaged in his PhD research, has agreed to join the business venture in a couple of years. In the meantime, he offers to support Ava in his spare time, including helping to set up the company. To equip the business with essential hardware, Ethan reaches out to Zoe Chen, a fellow PhD alumna who now operates an advanced materials lab, NanoLab Solutions Pty Ltd. Zoe offers Ethan a 30% discount on lab services for the first eighteen months if he agrees to feature NanoLab’s logo on Ava’s website and all promotional materials. Ethan, seeing the value in this offer, promptly signs the agreement.

The contract specifies that the first payment to NanoLab Solutions Pty Ltd is due in six months from the signing date. Ethan informs Ava about this arrangement. Ava is excited about the idea of a partnership with, however, Ava feels that she should shop around for some other options first before prematurely committing to an agreement.