5. The financial statements of Mark's Auto Repair reflect cash of $4,600, accounts receivable of $11,500, accounts payable of $22,900, inventory of $17,800, long-term debt of $42,000, and net fixed assets of $63,800. The firm estimates that if it wanted to cease operations today it could sell the inventory for $25,000 and the fixed assets for $49,000. The firm could also collect 100 percent of its receivables. What is the market value of the assets?

Question

5. The financial statements of Mark's Auto Repair reflect cash of $4,600, accounts receivable of $11,500, accounts payable of $22,900, inventory of $17,800, long-term debt of $42,000, and net fixed assets of $63,800. The firm estimates that if it wanted to cease operations today it could sell the inventory for $25,000 and the fixed assets for $49,000. The firm could also collect 100 percent of its receivables. What is the market value of the assets?

Answer 1

The market value of the assets can be calculated by summing up the market value of the inventory, fixed assets, and accounts receivable.

Market value of inventory: $25,000
Market value of fixed assets: $49,000
Market value of accounts receivable: $11,500

Total market value of assets = $25,000 + $49,000 + $11,500 = $85,500

Therefore, the market value of the assets is $85,500.