ICU company operates under ideal conditions of uncertainty, started its operations on January 1, 2018. In...

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ICU company operates under ideal conditions of uncertainty, started its operations on January 1, 2018. In its first year in business, the company acquires equipment to produce its specialized product. The equipment will last for 3 years, with no salvage value. The company finances the purchase of the equipment through a $600 bank loan at a 5 percent interest with the balance financed by issuing common shares. Cash flows from the product will be $1,000 for each year if the state of nature is high and $400 per year if the state is low. Assume that cash flows are received at year-end. Objective state probabilities each year are 0.6 for the high state and 0.4 for the low state. ICU's cost of capital is 5% per annum. The company plans to pay a dividend of $100 at the end of years 1 and 2, with the remaining cash distributed at the end of year 3. During year 1, the Low state happens. Required_ a-Income statement for ICU for the year ended December 31, 2018. b- Balance sheet as at the end of 2018 ICU company operates under ideal conditions of uncertainty, started its operations on January 1, 2018. In its first year in business, the company acquires equipment to produce its specialized product. The equipment will last for 3 years, with no salvage value. The company finances the purchase of the equipment through a $600 bank loan at a 5 percent interest with the balance financed by issuing common shares. Cash flows from the product will be $1,000 for each year if the state of nature is high and $400 per year if the state is low. Assume that cash flows are received at year-end. Objective state probabilities each year are 0.6 for the high state and 0.4 for the low state. ICU's cost of capital is 5% per annum. The company plans to pay a dividend of $100 at the end of years 1 and 2, with the remaining cash distributed at the end of year 3. During year 1, the Low state happens. Required_ a-Income statement for ICU for the year ended December 31, 2018. b- Balance sheet as at the end of 2018