QUESTION 1 Read the following carefully and answer the questions which follow: RAABOAD LTD Raaboad Lid was established 30 years ago in Accra, Chafounder was a retired Marketing Manager of a leading distribution company who decided to use his expertise to build a comp would manufacture and distribute concrete products for the construction industry. The company became a leader in the supply of roofing tiles and pavement lybookssago, Raaboad Lid, added the production of concrete slabs and kerbs to its businesshportfolio company has been successful in its operations because it relies on competent and de workforce. The company has a head office and ten distribution depots across that doasnarytotal workforce of 300The company provides haulage services to its customers who buy in b However, in recent times the management of the company has had difficulties controll haulage aspect of the business and is contemplating to outsource the service. Competition in the industry is becoming more intense as new entrants both foreign and coming in with competitive prices and modern techindogmpany has to act fast in order to reposition itself as a leader in the industry. The Managing Director and his team have decided to prepare a plan for the next five years to the challenges facing the company.a meeting to discuss the first draft plan, the following estimates were made: (a) Sales in the current year (2013) should reach GHC10,000,000 and forecasts for the nex years are GHC10,600,000; GHC11,400,000; GHC12,400,000; GHC13,600,000 and GHC15,000,000. (b) The ratio of net profit after tax to sales is 10%, and this is expected to continue through planning period. (c) Total assets less current liabilities will remain around 125% of sales. It was also suggested that (i) If profits rise, dividends should rise by at least the same percentage (ii) An earnings retention rate of 50% should be maintained. (iii) The ratio of long term borrowing to long term funds (debt plus equity) is limited b market to 30%, which happens also to be the current gearing level of the company The proposals have been referred to a team of which you are part to prepare the financial pla consideration of management