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 ________.

Question

Quizplus · Accepted Answer

The book value of the total assets today is $4,600,000 ($2,500,000 + $1,900,000 + $200,000). The market value of those assets is $3,900,000 ($2,000,000 + $1,900,000).