Chapter 10 q15 identify and define the borrower

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Chapter 10, Q15 Identify and define the borrower-specific and market-specific factors that enter into the credit decision. What is the impact of each type of factor on the risk premium?
Level of interest rates: A higher level of interest rates may lead to higher default rates, so lenders are more reluctant to lend under such conditions. Chapter 10, Q23 23. MNO Inc., a publicly traded manufacturing firm in the United States, has provided the following financial information in its application for a loan. All numbers are in thousands of dollars. Assets Cash $ 20 Liabilities and Equity Accounts payable $ 30 Accounts receivables 90 Notes payable Inventory 90 Accruals Long-term debt 150 Plant and equipment 500 Equity (ret. earnings = $22) Total assets $700 Total liabilities and equity $700 Also assume sales = $500,000 ; cost of goods sold = $360,000; and the market value of equity is equal to the book value. a. What is the Altman discriminant function value for MNO Inc.? 90 30 400 + 1.0X 5 = 3.104

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