Marcus Enterprises began in 2011 when Damien Marcus invested $8,000 in exchange for capital stock. The following is the work sheet for the company at the end of the first year in business.
Marcus Enterprises
Work Sheet
For the Year Ended December 31, 2011
Prepare an income statement, retained earnings statement, and classified balance sheet for Marcus Enterprises for the year ended December 31, 2011.
Definitions:
Certainty Equivalent Approach
A method to evaluate risk where uncertain future cash flows are converted into certain cash flows under the assumption of risk neutrality.
Risk-Free Rate
The interest rate excluding all risk premiums. The risk-free rate consists of the pure rate and an inflation adjustment. It is approximated by the three-month treasury bill rate. Written as kRF.
Real Option
The value of additional decision-making opportunities available to an investor or company once an initial investment has been made.
Financial Results
The summary of a company's financial performance and position, typically reported on a quarterly and annual basis.
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