Q.1. For the years 2014-1015, the financial statements of ABC Company are given in Table 1 and Table 2. Define the performance ratios (Liquidity, Debt vs Equity, Activity and Profitability) and compare them with industrial standards. Table 1. ABC Balance Sheet (1000 of Dollars)2014 (dollars) 2015 (dollars)AssetsCash 18,500 17,000Marketable securities 0 5,000Accounts receivable 39,500 28,500Inventories 98,000 113,000 Total current assets 156,000 163,500Plant and equipment (net) 275,000 290,000Other assets 3,000 8,000Total assets 434,000 461,000LiabilitiesAccounts payable 34,500 18,000Notes payable 20,000 25,000Accrued expenses 18,500 11,500Total current liabilities 73,000 54,500Mortgage payable 20,000 30,000Common stock 200,000 200,000Earned surplus 141,000 177,000Total liabilities and equities 434,000 461,500Table 2. ABC Company Income Statement (1000 of Dollars) 2014 (dollars) 2015 (dollars)Sales 330,000 395,000Cost of sales* 265,000 280,000Gross profit 65,000 115,000Selling and administrative 95,000 88,000Other expenses 4,000 3,500Interest 2,000 3,000Profit before taxes (36,000) 20,500Income Tax 0 10,000Net Income (loss)** (36,000) 10,500*Includes depreciation of $15,000 in 2014 and $515,000 in 2015** No dividends paid in 2015.Q.2 ABC Company uses overtime, inventory and subcontracting to absorb the fluctuations in demand for its playgrounds for children. An aggregate production plan is devised annually and updated quarterly. Cost data, expected demand, and available capacities in units for the next four quarters are given here. Demand must be satisfied in the periods it occurs; that is, no backordering is allowed. Design a production plan that will satisfy demand at minimum cost. Expected Regular Overtime SubcontractQuarter Demand Capacity Capacity Capacity 1 650 750 100 500 2 1250 950 150 500 3 1350 1050 200 500 4 2750 1050 200 500Regular production cost per unit $200Overtime production cost per unit $250Subcontracting production cost per unit $300Inventory holding cost per unit per period $30Beginning Inventory 300 unitsQ.3. SuperPart, an auto part distributor, has a large warehouse in Istanbul region and is deciding on a policy for the use of TL or TLT transportation for inbound shipping. TLT shipping costs $1 per unit. TL shipping costs $800 per truck plus $100 per pickup. Thus, a truck used to pickup from three suppliers costs 800 + 3 x 100 = $1100. A truck can carry up to 2000 units. SuperPart incurs a fixed cost of $100 for each order placed with a supplier. Thus, an order with three distinct suppliers incurs an ordering cost of $300. Each unit costs $50, and SuperPart uses a holding cost of a 20 percent. Assume that product from each supplier has annual demand of 3000 units.a) What is the optimal order size and annual cost if LTL shipping used? What is the time between orders? b) What is the optimal order size and annual cost per product if TL shipping is used with a separate truck for each supplier? What is the time between orders? c) What is the shipping policy you recommend if each product has an annual demand of 3000? What is shipping policy you recommend for products with an annual demand of 1500? Q.4. A decision maker must decide whether or not automate a given process. Depending on the technological success of the automation project, the result will turn out to be either poor, fair, or excellent. The net payoffs for possible outcomes (expressed in the net present value) are - $90K, $40K, and $300K, respectively. The initially estimated probabilities that each outcome will occur are 0.5, 0.3, and 0.2 respectively. Suppose that it is possible for the decision maker to conduct a technology study at the PW cost of $10K. The study should disclose that the enabling technology is either "shaky", "promising" or "solid" with the probabilities of 0.41, 0.35, and 0.24 respectively.a) Draw the decision tree diagram for this problem. (10 Marks)b) Show the expected future events (outcomes), along with their respective cash flows and probabilities of occurrence. (15 Marks)