P4-37.Compute and Interpret Z-score Refer to the financial information for Costco in Problem P4-33, to answer the requirements. Costco's stock closed at $294.76 on August 30, 2019 (the last trading day before fiscal year end).

Required

a. Compute and interpret the company's Altman Z-scores for 2019.

b. The company has a large amount of liquid investments reported as current assets. What would be the effect on the company's Altman Z-score of selling $ I ,OOO million of investments and using the proceeds for each of the following independent transactions?

1. Repay long-term debt. 11. Pay dividends.

For each scenario, assume that the company's market capitalization would decrease by $ 1,000 million

(in addition to any balance sheet effects of each transaction). Also assume that these transactions happen near year end such that there are no income statement effects in 2019.