Klingon Widgets, Incorporated, purchased new cloaking machinery three years ago for $4.0 million. The machinery can be sold to the Romulans today for $6.2 million. Klingon’s current balance sheet shows net fixed assets of $2.8 million, current liabilities of $710,000, and net working capital of $130,000. If all the current accounts were liquidated today, the company would receive $825,000 cash. What is the book value of Klingon’s total assets today? What is the sum of the market value of NWC and the market value of fixed assets?
Klingon Widgets, Incorporated, purchased new cloaking machinery three years ago for $4.0 million. The machinery can be sold to the Romulans today for $6.2 million. Klingon’s current balance sheet shows net fixed assets of $2.8 million, current liabilities of $710,000, and net working capital of $130,000. If all the current accounts were liquidated today, the company would receive $825,000 cash.
- What is the book value of Klingon’s total assets today?
- What is the sum of the market value of NWC and the market value of fixed assets?
Book value of assets of the company
The equity value of a corporation as stated in its financial accounts is known as book value. The book value figure is calculated by taking the total worth of a company's assets and deducting any obligations the company may still owe. It is often evaluated in relation to the market capitalization of the company.
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