Lew's Auto Repair has cash of $18,600,accounts receivable of $34,500,accounts payable of $28,900,inventory of $97,800,long-term debt of $142,000,and net fixed assets of $363,800.The firm estimates that if it wanted to cease operations today it could sell the inventory for $85,000 and the fixed assets for $349,000.The firm could collect 100 percent of its receivables as they are secured.What is the market value of the firm’s assets?

Question

Lew's Auto Repair has cash of $18,600,accounts receivable of $34,500,accounts payable of $28,900,inventory of $97,800,long-term debt of $142,000,and net fixed assets of $363,800.The firm estimates that if it wanted to cease operations today it could sell the inventory for $85,000 and the fixed assets for $349,000.The firm could collect 100 percent of its receivables as they are secured.What is the market value of the firm&#8217;s assets?

Quizplus · Accepted Answer

The market value of the firm's assets is calculated by adding the cash, the market value of the accounts receivable, the market value of the inventory, and the market value of the fixed assets: $18,600 (cash) + $34,500 (accounts receivable) + $85,000 (inventory) + $349,000 (fixed assets) = $487,100.

Lew's Auto Repair Has Cash of $18,600,accounts Receivable of $34,500,accounts