Please solve each requirement and show solution for each box. Make sure to include notes step by step of calculations shown descriptions and number use to solve each part

Declan Peterson is the management accountant at Pine Bank, where the data science department is leading an initiative to predict whether loans will default or repay. The default rate in the training set is 10%. After building a model on the training set that predicts whether a loan will default or repay, the data scientist applies it to the validation set of 4,000 observations to evaluate its performance. Read the tequirementsRequirements 1. Help the data scientist complete the confusion matrixes below for different model thresholds. Confusion Matrix (0.40) Confusion Matrix (0.55) Predicted Predicted Outcomes Outcomes Default Repay Total Default Repay Total Actual Default Actual Default 180 400 Outcomes Repay 2,160 1,440 3,600 Outcomes Repay 3,600 Total 2,400 4,000 Total 2,200 2. Assume that Pine Bank has $1,000 to invest in each loan of the validation sample. If Pine Bank does not invest in a loan, it keeps the money in a risk-free investment at 2% a year for 3 years (ignore the time value of money). If Pine invests in a loan that eventually repays, it receives 10% a year for 3 years. If Pine invests in a loan that eventually defaults, Pine loses 60% of the amount of the loan. Fill in the payoff matrix below. Which model threshold should Declan and the data scientist use? Payoff Matrix Predicted Outcomes Default Repay (Do Not Invest in Loan) (Invest in Loan) Actual Default Outcomes RepayRequirement 1. Help the data scientist complete the confusion matrixes below for different model thresholds. Start by completing the confusion matrix for the cutoff point 0.40. Confusion Matrix (0.40) Predicted Outcomes Default Repay Total Actual Default 240 160 400 Outcomes Repay 2,160 1.440 3,600 Total 2,400 1600 4.000 Complete the confusion matrix for the cutoff point 0.55. Confusion Matrix (0.55) Predicted Outcomes Default Repay Total Actual Default 180 220 400 Outcomes Repay 1620 1980 3,600 Total 1800 2,200 4000Requirement 2. Assume that Pine Bank has $1,000 to invest in each loan of the validation sample. If Pine Bank does not invest in a loan, it keeps the money in a risk-free investment at 2% a year for 3 years (ignore the time value of money). If Pine invests in a loan that eventually repays, it receives 10% a year for 3 years. If Pine invests in a loan that eventually defaults, Pine loses 60% of the amount of the loan. Fill in the payoff matrix below. Which model threshold should Declan and the data scientist use? Start by construting the payroll matrix. (Enter a loss amount with a minus sign or parentheses.) Payoff Matrix Predicted Outcomes Default Repay (Do Not Invest in Loan) (Invest in Loan) Actual Default Outcomes Repay Calculate the payoff at each cutoff probability. Total payoff at cutoff 0.40 = Total payoff at cutoff 0.55 = Which model threshold should Declan and the data scientist use? Declan and the data scientist should use the cutoff value at because it results in the predicted payoff