3.Market Values and Book ValuesBenedict Cruisers, Inc., purchased new cloaking machinery five years ago for $20million. The machinery can be sold to the Allen Inc. today for $18 million.Benedict's current balance sheet shows net fixed assets of $15.5 million, currentliabilities of $700,000, and net working capital of $226,000. If all the currentaccounts were liquidated today, the company would receive $1.08 million cash.a. What is the book value of Benedict's assets today?b. What is Benedict's market value of assets?

Market value refers to the value of the asset if the asset is sold in the current market place.Book…

Answered: Market Values and Book Values Benedict…

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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Kimbo Widgets Inc. purchased new cloaking machinery five years ago for $5 million. The machinery can be sold to the Rimalons today for $4.5 million. Kimbo's current statement of financial position shows net fixed assets of $3.5 million, current liabilities of $0.75 million, and networking capital of $350,000. If all the current assets were liquidated today, the company would receive $1.11 million cash. (Do not round intermediate calculations. Enter the answers in dollars, not millions of dollars, i.e. 1,234,567. Omit $ sign in your response.) What is the book value of Kimbo's total assets today? Total asset book value $ What is the market value? Total asset market value
Muffins masonry incs balance sheet list next fixed assets as $ 14 million. The fixed assets could currently be sold for 19 million dollars. muffins current balance sheet shows current liabilities of 5.5 million dollars and networking capital of 4.5 million dollars. if all the current accounts were liquidated today the company would receive 7.25 million dollars cash after paying the 5.5 million incurrent liabilities. what is the book value of muffins missionaries assets today and market value of these assets? Enter answers in millions of dollars rounded to 2 decimal places Book value. Market value. Current assets: Fixed assets: Total:
1. Purple Corporation has an average cost of capital of 22%. It bought an investment property that would require a cost to dispose of P450,000. Which of the following statements is FALSE? * answer not given The cost of illiquidity is P8,434 if Purple plans to sell it 20 years from acquisition. If Purple is deciding to sell the asset on the fifth or tenth year, the difference in cost of illiquidity is P104,895. There will be no cost of illiquidity if it plans to never sell the asset. The cost of illiquidity is P368,853 if it plans to sell the asset one year from acquisition. 2. Violet Corporation has P500,000 current liabilities, P2,500,000 noncurrent liabilities and P5,000,000 equity. It has a weighted average cost of capital of 18% and annual earnings of P1,500,000 for the first five years and P2,000,000 for the last 5 years. How much is the value of the firm using economic value added? * P8,953,102.81 P8,857,570.58 P9,938,846.03 P10,001,736.82
Moshup Ltd sold a building for $145 million. The building cost $205 million several years ago and at the time of sale it had a carrying amount of $128 million. Calculate, to the nearest million dollars, the gain or loss on the sale of the building. Designate any loss calculated by preceding your figure with a negative sign.
J & J Enterprises is considering a cash acquisition of Patterson Steel Company for $5,800,000. Patterson will provide the following pattern of cash inflows and synergistic benefits for the next 20 years. There is no tax loss carryforward. Use Appendix D as an approximate answer, but calculate your final answer using the formula and financial calculator methods. Cash inflow (aftertax) Synergistic benefits (aftertax) Net present value b. Should the merger be undertaken? The cost of capital for the acquiring firm is 11 percent. a. Compute the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) Yes 1-5 $620,000 58,000 O No Years 6-15 $780,000 78,000 16-20 $980,000 88,000
XXX plc purchased new machinery three years ago for £4 million. The machinery can be sold today for £2 million. XXX plc's current statement of financial position shows net non-current assets of £2,500,000, current liabilities of £1,375,000, and net working capital of £725,000. If all the current assets were liquidated today, the company would receive £1.9 million in cash. The book value of XXX plc's assets today is _____ and the market value of those assets is ____.
A firm purchased $62,800 of fixed assets two years ago. The company no longer needs these assets so it is going to sell them today for $28,500. The assets are classified as five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for Years 1 to 6, respectively. What is the net cash flow from this sale if the firm's tax rate is 23 percent and no bonus depreciation is taken? $29,281.04 $26,576.00 $28.878.12 $27,516.60 O $29,648.12
Your company just purchased a bar-code system for $70,000. It has a five-year MACRS class life. The expected market value of the bar-code system in 3 years is $32,000. What is the gain (or loss) when this asset is sold at end year 3? Solve, (a) $11,840 (b) $5,120 (c) −$1,600 (d) $11,120.
Premier Steel is selling a machine for $20,000 that currently has a book value of $7,840. The machine is at the end of its useful life and the company is also liquidating its investment of $2.500 in working capital that was necessary when the company purchased the machine. What will be the non-operating, terminal year cash flows at the end of its useful life if the company's marginal tax rate is 40% ? $35.238 Ⓒ$17,636 $34,660 $15.136
B2b Co. Is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $360,000 and hasa 12-year life and no salvage value. The expected annual income for each year from thos equipment follows. Compute the (a) annual net cash flow, (b) payback period, and (c) accounting rate of return for this equipment. $225,000 ,120,000, 30,000, 38,250, Income 36,750?
2. Clayton Corporation recently purchased a new machine for $307,890 with an eight-year life. The old equipment has a remaining life of eight years and no disposal value at the time of replacement. Net cash flows will be $90,000 per year. What is the internal rate of return? a) 24% b) 29%c) 33%d) None of the above
Acme is looking to acquire Pinder Co now. Acme is expected to generate annual cash flows of $15,000,000 in perpetuity and Pinder is expected to generate annual cash flows of $6,000,000 in perpetuity. The discount rate for both Acme and Pinder is 8%. If Acme acquires Pinder, Acme expects to be able to reduce operating costs by $4,500,000 for the first five years. However, Acme will also incur integration costs of $3,000,000 in the first year. All cash flows occur at the end of the year. To encourage investment into electric bicycles, the government is offering Acme an option to abandon its operations and sell all related assets for $1 million at the end of year 4. If Acme chooses the option to sell all related assets to the government, it will not receive the cash flows generated from the electric bicycle business in that year. What is the value of this option? Answer based only on the information provided.

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