Question 1 Use Altman's discriminant function (the ZScore model) to determine whether to grant credit to Nova Enviro Inc, where: Balance Sheet (in thousands S) Assets Liabilities Cash 150 Notes payable 1'0 Accounts receivable 350 Debt (long term} 830 Plant and equipment 800 Contributed capital 200 Land Retained earnings 3% Total assets 1,500 1,500 Income Statement (in thousands $) Sales 1350 Cost of goods sold 13025 Depreciation 1223 Interest expense 122 Taxes Net income 230 Notes: Nova Envii'o pays 50% dividends. Equity is currently selling at 130% of its book value. a) What is the market value of equity? b) Calculate Nova Envii'o' s Z score. Should their loan application be approved? c) If you ever decide to grant the loan, what interest rate would you charge on the loan? Assume: The co.latera.l (C) is 55% of the repayment obligation:= and time value of money (ie. risk-free rate) is 2.5%