Original Carry Corporation Data:

Accounts Receivable: $439,000

Inventories: $894,000

Other Fixed Assets: $61,000

Accounts and Notes Payable: $432,000

Accruals: $170,000

Cost of Goods Sold: $3,580,000

Administrative and selling Expenses: $236,320

P/E Ratio: 5.0

C.) Suppose Cary Corporation is considering installing a new computer system that would provide tighter control of inventories, accounts receivable, and accounts payable. If the new system is installed, the following data are projected (rather than the data given earlier) for the indicated balance sheet and income statement accounts:

NEW Carry Corporation Data:

Accounts Receivable: $395,000

Inventories: $700,000

Other Fixed Assets: $150,000

Accounts and Notes Payable: $275,000

Accruals: $120,000

Cost of Goods Sold: $3,450,000

Administrative and selling Expenses: $248,775

P/E Ratio: 6.0x

PART C Continued:

How do these changes affect the projected ratios and the comparison with the industry averages?

D.) If the new computer system were even more efficient than Cary's management had estimated and thus caused the cost of goods sold to decrease by $125,000 from the projections in part (c), what effect would it have on the company's financial position?

E.) If the new computer system were less efficient than Cary's management had estimated and caused the cost of goods sold to increase by $125,000 from the projections in part (a), what effect would it have on the company's financial position?

23 INPUT DATA: KEY OUTPUT: 24 Balance Sheet 43 RE last year 45 Income Statement 42 RE last year 45 Income Statement 23 INPUT DATA: KEY OUTPUT: 24 Balance Sheet 43 RE last year 45 Income Statement 42 RE last year 45 Income Statement