Use the following financial statements to answer questions (a) to (c): iABC Ltd Balance Sheet (in millions of dollars) Assets Liabilities Cash $400 Accounts Payable Accounts Receivables 1,750 Accrued Taxes Inventories 1,250 Bills Payable Fixed Assets 5,000 Long-term debt Equity Total $8,400 Total $300 200 900 3,000 4,000 $8,400 iABC Ltd Income Statement (in millions of dollars) Sales Revenue Cost of Goods Sold Interest Taxes @ 30% $5,000 3,500 1,500 Consider the Altman's Z-score. WC RE EBIT Sales MVE Altman 2 = 1.2 x + 1.4 x + 3.3 x + 1.0 x + 0.6 x TA TA TA TA BVLTD Where WC = Working Capital, TA = Total Assets, RE = Retained Earnings, MVE=Market Value of Equity and BVLTD = Book Value of Long-Term Debt. (a) Evaluate Altman's discriminant function for IABC Ltd if the firm pays tax at 30%, has a 45% dividend payout ratio and the market value of equity is equal to the book value (b) Should you approve iABC Ltd's application to your bank for $3,000,000 for a capital expansion loan? Justify your answer. (C) What is the critical variable in the Altman's Z-score for IABC Ltd? What is underlying this variable? Justify your