A bookstore is incorporated at the beginning of the year, so all entries of balance sheet are zero at the beginning of the year $($Jan$.1).$

David invests $$5,000$ at the beginning of the year and withdraws $$5,000$ at the end of the year.

The bookstore buys books worth $$5,000.$

The bookstore sells all of the books for $$15,000($cash$)$ during the year.

The bookstore incurs operating expense of $$3,000$ to pay utilities.

At the beginning of the year, the bookstore borrows $$5,000$ whose interest rate is $40\%$ at the beginning of the year. The bookstore pays interest and principal at the end of the year.

The tax rate is $20\%.$

What is the firm value at the end of the year?

Question $5$ options:

$$1,000$

$$2,000$

$$3,000$

$$4,000$

Can not be determined