MNO, Inc., a publicly traded manufacturing firm in the United States, has provided the following financial information in its application for a loan. The market value of equity is 1.58 times the book value of debt. Retained earnings are 5.27% of total assets. Sales are 52% of total assets. Earnings before interest and taxes are 32.87% of total assets. Finally, Working capital is 34.25% of total assets.

a) What is the Altman discriminant function value for MNO, Inc.?

b) Should you approve MNO, Inc.'s application to your bank for a $5,000,000 capital expansion loan?

c) If sales for MNO were 38% of total assets and the market value of equity was only half of book value, would your credit decision change?