Question 1 (15 marks) Owen Lim retired a few years ago at the age of 47, having built up a substantial retirement portfolio through a range of business activities. He moved to Port Douglas in Far North Queensland Australia, to follow his dream of a relaxed life in a coastal tropical climate near the beach and rainforest. However, after a few months, Lim became restless and opened a water sports hire and equipment store. The single store soon grew into a chain of four outlets spread from Port Douglas, Cairns, The Whitsundays, to Noosa. As Lim put it, 'I can't believe how fast we've expanded. It's basically been unrestrained growth growth that has occurred despite what we've done'. Although business appeared protable, the chain did have its share of problems. Water sport sales tended to be seasonal, with a signicant slowdown once the dry season nished, which could play havoc with the bank account. Muller therefore added shing and hunting equipment to his product line. Also, the need to build up required inventories was a strain and left cash balances at very low levels, occasionally giving rise to the need to speak with his bank manager about short-term bank loans to tide the business over. Lim further expanded the business to include big game shing trips for beginners, which was promoted through social media, local shing clubs and included equipment hire and boat charter. Reports from the company's nancial accounting system seemed to indicate that this part of the business was losing money because of high and increasing costs, but Lim could not be certain. 'The prot or loss statement prepared by our CPA rm is not too useful in assessing the problem\