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Muffin's Masonry, Inc
Muffin's Masonry, Inc.'s, balance sheet lists net fixed assets as $24.00 million. The fixed assets could currently be sold for $39.00 million. Muffin's current balance sheet shows current liabilities of $10.50 million and net working capital of $9.50 million. If all the current accounts were liquidated today, the company would receive $7.75 million cash after paying the $10.50 million in current liabilities. What is the book value of Muffin's Masonry's assets today and the market value of these assets?
Expert Solution
- Assets value= current assets + net fixed assets
- Current assets= net working capital + current liabilities
Book Value
Current assets = 9.5 +10.5 = $ 20 million
Book value= 20+24 = $44 million
Market value
Current assets= 7.75+ 10.5= $18.25 million
Market value=39 + 18.25= $57.25 million
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