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ABC Corporation has the following information to estimate its liquidation value. Cash = 50,000 Noncash Assets, Book Value =  100,000 Noncash Assets, Selling Price =140,000 Cost to Dispose (40% chance) =10,000 Cost to Dispose (60% chance) =25,000 Liabilities, Book Value = 60,000 Liquidation cost to be incurred = 5,000 Based on the information above, how much is the expected net liquidation value of the corporation?  a. 90,000.00  b. 109,000.00  c. 125,000.00  d. 106,000.00

ABC Corporation has the following information to estimate its liquidation value. Cash = 50,000 Noncash Assets, Book Value =  100,000 Noncash Assets, Selling Price =140,000 Cost to Dispose (40% chance) =10,000 Cost to Dispose (60% chance) =25,000 Liabilities, Book Value = 60,000 Liquidation cost to be incurred = 5,000 Based on the information above, how much is the expected net liquidation value of the corporation?  a. 90,000.00  b. 109,000.00  c. 125,000.00  d. 106,000.00

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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ABC Corporation has the following information to
estimate its liquidation value.
Cash = 50,000
Noncash Assets, Book Value =  100,000
Noncash Assets, Selling Price =140,000
Cost to Dispose (40% chance) =10,000
Cost to Dispose (60% chance) =25,000
Liabilities, Book Value = 60,000
Liquidation cost to be incurred = 5,000
Based on the information above, how much is the expected net liquidation value of the corporation? 

a. 90,000.00 
b. 109,000.00 
c. 125,000.00 
d. 106,000.00 

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