PI.1 Economic Balance Sheet-The Second Market Value Company: Prepare an economic balance sheet for The Second Market Value Company as of Year 0 using the following information and the financial statements provided in Exhibit P1.1. The company's share price is $8.00 and it has 500 shares outstanding. Its debt is trading at a discount, indicating that its market value is equal to 95% of its book value. The company has land valued at $2,000 that is not necessary to operate the business. Based on the amount and type of debt financing. the company creates $2,200 in value from financing. EXHIBIT P1.1 The Second Market Value Company Financial Statements Year -1 Year 0 Year-1 Year 0 Balance Sheet-Assets: Cash balance $ 210.0 $ 230.0 Balance Sheet-Liabilities & Equity: Accounts payable. Accounts receivable. Inventory.. 690.0 340.0 720.0 Other current operating liabilities. $ 150.0 140.0 $160.0 160.0 360.0 Total current liabilities. $ 290.0 $ 320.0 Total current assets $1,240.0 $1.310.0 Debt 4,000.0 4,500.0 Net property, plant and equipment... 6,030.0 6,220.0 Total liabilities. $4,290.0 $4,820.0 Total assets. $7,270.0 $7,530.0 Common stock. 2,160.0 2,160.0 Retained earnings 820.0 550.0 Totul shareholders equity $2,980.0 $2,710.0 Income Statement: Revenue. Cost of goods sold. Gross margin Total liabilities and equities $7,270.0 $7.530.0 $2,340.0 $2,580.0 -510.0 580.0 $1.830.0 $2,000.0 Selling, general & administrative 370.0 460.0 Operating income.. $1,460.0 $1,540.0 Interest expense. 530.0 560.0 Income before taxes. Income tax expense. $ 930.0 $ 980.0 372.0 392.0 Net income. 558.0 $ 588.0