Edward IAltman Developed a Multivariate Model to Predict Bankruptcy

Multiple Choice

Edward I.Altman developed a multivariate model to predict bankruptcy.The model produces an overall discriminant score called a Z value.Which of the following statements is probably an unreasonable statement relating to the Z value?

A) The sales generating ability of the firm's assets is one of the important considerations in the Z value.
B) The lack of a market value for a company's stock will reduce the significance of the Z value approach.
C) Total assets is an important consideration in the Z value computation.
D) Cumulative profitability over time is considered in the Z value computation.
E) A Z score of 2.00 or below indicates a very healthy company.