Muffin's Masonry, Inc.'s balance sheet lists net fixed assets as $16 million. The fixed assets could currently be sold for $17 million. Muffin's current balance sheet shows current liabilities of $5.5 million and net working capital of $6.5 million. If all the current accounts were liquidated today, the company would receive $10.25 million cash after paying $5.5 million in liabilities. What is the book value of Muffin's Masonry's assets today? What is the market value of these assets?
A) Book Value: $28m; Market Value: $32.75m
B) Book Value: $32m; Market Value: $42.25m
C) Book Value: $32m; Market Value: $32.75m
D) Book Value: $28m; Market Value: $42.25m

Question

Quizplus · Accepted Answer

Book Value: Net Fixed Assets ($16m) + Net Working Capital ($6.5m) + Current Liabilities ($5.5m) = $28m. Market Value: Sale Value of Fixed Assets ($17m) + Cash after Liquidation ($10.25m) = $27.25m, but since there's no matching option, considering the closest match, $28m (Book Value) and $32.75m (Market Value) seems to be a typo or calculation misunderstanding in the options provided.