Adjusted BV: Troy Corp. has cash of $24,250, receivables of $81,700, and inventory of $117,875. In addition, the firm has property, plant, and equipment of $152,000. Management has also told you that you can reasonably expect to collect 85 percent of the receivables, that the inventory could be sold to realize 80 percent of its book value, and that the sale of the property, plant, and equipment would yield $113,250. What is the liquidation value of this company? Round to the nearest dollar.

Question

Quizplus · Accepted Answer

The liquidation value is calculated by summing the cash, 85% of receivables, 80% of inventory, and the sale value of property, plant, and equipment: $24,250 + (0.85 * $81,700) + (0.80 * $117,875) + $113,250 = $301,245.