Paul's Clothes (PC) PC is a sole trader business that is owned and managed by Paul. Paul financed the business using a mortgage on his home. PC has two retail clothes shops in neighbouring towns in country A. Both shops sell a range of suits, shirts, ties and footwear for men. PC has been trading for four years and Paul has been pleased with the profits made. Paul is now deciding on a new business objective. PC has a Unique Selling Point (USP) that focuses on quality. The range of clothes sells at high prices. Unemployment has started rising in the country and average incomes are falling. Paul has prepared an overall cash flow forecast for both shops, as shown below in Table 1. Paul is considering buying a computerised inventory management system. Table 1: Cash flow forecast for the next six months ($000s) Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Cash in: Revenue 12 10 9 5 4 X Cash out: New computerised inventory system 10 0 0 0 0 0 Employee costs 3 3 3 3 3 2 Purchases 5 4 4 4 4 2 Marketing 2 2 2 2 2 1 Opening Balance 15 7 8 8 4 (1) Closing Balance 7 8 8 4 (1) 1 *Numbers in brackets indicate a negative figure. The purchase of a new computerised inventory management system will be an important innovation for PC. It will ensure that Paul can access sales information about products quickly and place orders with suppliers before items are sold out.