CASE 4 (20 points) Northland Corporation is suffering from financial distress as it can be seen from its balance sheet: YEAR YEAR YEAR 000 109000 COCO 100 Two scenarios are possible for Northland in Year 3: In scenario 1. Year 3 for Northland is expected to result in an additional $150,000 operating loss. In scenario 2 Year 3 is expected to be a breakout year for Northland when higher sales and lower costs owing to economies of scale are forecasted to produce operating profits of $250,000 in Year 3. Total assets are expected to remain at $200,000 under either scenario. Total debt will be increased to finance additional sperating losses. Operating profits will be used to reduce total debt. Instructions: a. Construct Northland's balance sheets under both scenarios (10 points) b. Based on your analysis, wil Northland Corporation still be balance sheet insolvent in Year 3 under scenario 1? If this trend continues, would you describe Northland's financial distress as a temporary or a permanent problem? (3 points) c. Based on your analysis, wil Northland Corporation still be balance sheet insolvent in Year 3 under scenario 22! this trend continues, would you describe Northland's financial distress as a temporary or a permanent problem? (3 points) There are two basic options in the situation of financial distress. Name and explain them. (4 points)