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Question
The Widget Co. purchased all of its fixed assets three years ago for $4 million. These assets can be sold today for $2 million. The current balance sheet shows net fixed assets of $2,500,000, current liabilities of $1,375,000, and net working capital of $725,000. If all the current assets were liquidated today, the company would receive $1.9 million in cash. The book value of the total assets today is ________ and the market value of those assets is ________.
A) $4,600,000; $3,900,000
B) $4,600,000; $3,125,000
C) $5,000,000; $3,125,000
D) $5,000,000; $3,900,000
E) $6,500,000; $3,900,000
Answer
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Related questions
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Q:
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Q:
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B) general partnerships.
C) limited partnerships.
D) corporations.
E) limited liability companies.
Q:
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Q:
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B) growth rate of the firm.
C) gross profit per unit produced.
D) market value per share of outstanding stock.
E) total sales.
Q:
A partnership with four general partners:
A) distributes profits based on percentage of ownership.
B) has an unlimited partnership life.
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D) limits each partner's personal liability to 25 percent of the partnership's total debt.
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Q:
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B) the partner's active participation in the firm's activities.
C) the lack of any potential financial loss.
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Q:
Which one of the following statements concerning a sole proprietorship is correct?
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B) The profits of a sole proprietorship are subject to double taxation.
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D) There are very few sole proprietorships remaining in the U.S. today.
E) A sole proprietorship is structured the same as a limited liability company.
Q:
Which one of the following questions is least likely to be addressed by financial managers?
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B) Should customers be given 30 or 45 days to pay for their credit purchases?
C) Should the firm borrow more money?
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E) How much cash should the firm keep on hand?
Q:
An example of a capital budgeting decision is deciding:
A) how many shares of stock to issue.
B) whether or not to purchase a new machine for the production line.
C) how to refinance a debt issue that is maturing.
D) how much inventory to keep on hand.
E) how much money should be kept in the checking account.
Q:
The date on which a shareholder is officially listed as the recipient of stock rights is called the:
A) issue date.
B) offer date.
C) declaration date.
D) holder-of-record date.
E) ex-rights date.