The following balances and turnover ratios for individual operating assets and operating liabilities have been calculated using end-of-year figures based on Trail Inc.s reformulated 2020 Balance Sheet:

Balance Turnover

Operating cash $ 50,000 55.00

Accounts receivable $125,000 22.00

Inventory $300,000 9.17

Property, plant & equipment $750,000 3.67

Accounts payable $175,000 15.71

Provisions $75,000 36.67

Net Operating Assets $975,000 2.82

Assuming that Trails operating profit margin after tax remains the same, what will happen to its RNOA if the Accounts Receivable turnover increases to 24, the inventory turnover increases to 11, and the Accounts Payable turnover increases to 17.5?

	1.	Trails RNOA will increase
	2.	Trails RNOA will decrease
	3.	Trails RNOA will remain the same
	4.	It is not possible to determine how the changes will affect Trails RNOA based on the information provided