, 22.06.2019 20:30 tilly40oooo

# This problem has been solved! see the answercompute and interpret altman's z-scoresfollowing is selected financial information for ebay, for its fiscal years 2005 and 2006.(in millions, except per share data) 2006 2005current assets \$ 4,970.59 \$ 3,183.24current liabilities 2,518.39 1,484.93total assets 13,494.01 11,788.99total liabilities 2,589.38 1,741.00shares outstanding 1,368.51 1,404.18retained earnings 4,538.35 2,819.64stock price per share 30.07 43.22sales 5,969.74 4,552.40earnings before interest and taxes 1,439.77 1,445.18compute and interpret altman z-scores for the company for both years. (do not round until your final answer; then round your answers to two decimal places.)2006 z-score = answer2005 z-score = answerwhich of the following best describes the company's likelihood to go bankrupt given the z-score in 2006 compared to 2007.the z-score in 2006 is half of the 2005 score. both z-scores are well above the score that represents a healthy company. the z-score in 2006 is double the 2005 score. the z-score has increased sharply, which suggests the company has greatly increased the risk of bankruptcy. the z-score in 2006 is half of the 2005 score. the z-score has decreased sharply, which suggests the company is in financial distress. the z-score in 2006 is double the 2005 score. the z-score has increased sharply, which suggests the company has greatly lowered the risk of bankruptcy.

Warren enterprises had the following events during year 1: the business issued \$26,000 of common stock to its stockholders. the business purchased land for \$18,000 cash. services were provided to customers for \$22,000 cash. services were provided to customers for \$11,000 on account. the company borrowed \$22,000 from the bank. operating expenses of \$18,000 were incurred and paid in cash. salary expense of \$1,400 was accrued. a dividend of \$10,000 was paid to the stockholders of warren enterprises. assuming the company began operations during year 1, the amount of retained earnings as of december 31, year 1 would be:
Precision dyes is analyzing two machines to determine which one it should purchase. the company requires a rate of return of 15 percent and uses straight-line depreciation to a zero book value over the life of its equipment. ignore bonus depreciation. machine a has a cost of \$462,000, annual aftertax cash outflows of \$46,200, and a four-year life. machine b costs \$898,000, has annual aftertax cash outflows of \$16,500, and has a seven-year life. whichever machine is purchased will be replaced at the end of its useful life. which machine should the company purchase and how much less is that machine's eac as compared to the other machine's