In emerging from reorganization under Chapter 11 of the bankruptcy laws, a company is expected to have total future cash flows from its restructured operations of $6,000,000 (discounted present value = $2,500,000) . In addition, excess assets, not needed for future operations, have a carrying value of $400,000 and are expected to be sold for $250,000. The company's reorganization value is:
A) $6,000,000
B) $6,250,000
C) $2,750,000
D) $2,900,000
Correct Answer:
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