Consider the Following Data of a Prospective Borrower What Is This Company's Z-Score (Round to Two Decimals)?
A)3

question 64

Multiple Choice

Consider the following data of a prospective borrower. $$\begin{array} { | l | r | } \hline \text { Working capital } & \$ 50000 \\\hline \text { Total assets } & \$ 500000 \\\hline \text { Market value of equity } & \$ 40000 \\\hline \text { Book value of long-term debt } & \$ 360000 \\\hline \text { Retained earnings } & \$ 15000 \\\hline \text { EBIT } & \$ 250000 \\\hline \text { Sales revenue } & \$ 1000000 \\\hline\end{array}$$ What is this company's Z-score (round to two decimals) ?

• A)3.78
• B)3.88
• C)3.98
• D)4.08

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Definitions:

Oral Contract

An agreement between parties spoken aloud and not recorded in written form, yet legally binding under certain circumstances.

Memorandum

A memorandum is a written message used in business or diplomacy to communicate formal information, policies, or instructions.

Oral Contract

An agreement between parties spoken and agreed to aloud rather than written, yet is legally binding.

Consideration

The benefit, interest, right, or profit involved in an agreement or contract, on which it is based.