When appraising theprofitabilityof a corporate borrower, what kinds of questions should the lender consider?

Select one or more:

a.Whether the profits are increasing with sales.

b.Whether the profits are retained or not.

c.Whether the borrower will apply for other loans from other banks.

d.Whether the borrower has already paid back the old debts.

e.None of the above

Consider the following data of a prospective borrower.Applying Altman's Z score. What is this company's Z score (round to two decimals)?

Current Assets

490,300

Fixed Assets

4,006,000

Total Assets

4,496,300

Current Liabilities

187,300

Long-term Labilities

3,000,100

Liabilities

3,187,400

Book value of Equity

1,308,900

Working Capital

400,000

Sales

8,000,000

EBIT

500,000

Retained Earnings

65,000

Number of shares

100,000

Price per share

18

Select one:

a.3.41

b.3.18

c.3.86

d.2.15

e.2.61