1. An AA-rated, one-year C&I loan from a firm with the following financial statement information (in millions of dollars):

Assets		Liabilities and Equity
Cash	40	Accounts payable	55
Accounts receivables	120	Notes payable	60
Inventory	210	Accruals	70
		Long Term debt	550
Plant and equipment	1,100	Equity (ret. Earnings = $200)	735
TOTAL ASSETS	1,470	TOTAL Liabilities and Equity	1,470

Also assume sales = $1,250 m, cost of goods sold = $930 m, and the market value of equity is equal to 2.2 times the book value. MC Bancorp uses the Altmans Z score model to evaluate AA-rated loans.

Z =