Part I Ali Harooz runs a small Business unit. He is concerned with the liquidity position of his firm as he has heard that liquidity problems are one of the most frequent explanations for business failure. The following data is available: Particulars Amount Inventory 1.50.000 Cash 60,000 Sundry Debtors 300.000 Creditors 360,000 Bills Receivable 35000 Bank Overdraft 40000 Required Q1. Calculate the current ratio and liquidity (acid test) ratio based on the above data.(8 marks) marks on each ratio calculation Q2. Give a brief evaluation of the liquidity position of Ali Harooz Business unit (2marks) Part II Company Seventh vision is considering an investment of $100,000. The useful life of the project is 10 years. The cutoff period is three (3) years. The board of directors has identified two alternatives A and B. The expected annual cash flows are as follows:(Using payback period) Cost or Cash Flow Alternative A Alternative ($100.000) Initial cost Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 35,000 28.000 32.000 40.000 ($100.000) 35,000 35.000 35,000 35.000 Q3. Suggest Seventh Vision which project is feasible to choose? (7 marks) Q4. Mentions any three valid reasons for choosing the particular project (3 Marks) Part III Q5. Why is important for firms to use pay back method in financial decision making give 5 valid reasons?(2.5 marks) Q6. Explain the accept and reject criteria of payback methods in detail.(2.5 marks)