if kennedy has net income of $1,600 and then liquidates, what amount of cash will the creditors receive? what amount of cash will the investors receive?:
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To determine the amount of cash the creditors and investors will receive when Kennedy liquidates, we need some additional information. Liquidation involves selling off all the assets of a company to pay off its debts and distribute any remaining funds to the investors.
1. Assessing liabilities: The first step is to determine the total amount of outstanding debts or liabilities Kennedy has at the time of liquidation. Liabilities can include loans, accounts payable, and other obligations to be settled.
2. Asset valuation: Next, we need to determine the total value of the company's assets that can be sold or converted to cash during the liquidation process. Assets can include cash, inventory, real estate, equipment, and investments.
3. Paying off creditors: Once the assets are sold, the proceeds are used to settle the debts or liabilities owed by the company. Creditors are first in line to be paid, and they will receive their share based on the priority of their claims and the available funds.
4. Distributing to investors: After the creditors' claims have been satisfied, any remaining funds will be distributed to the investors. The amount received by investors will depend on the ownership structure and agreements in place. Typically, investors receive funds based on their ownership percentage or the terms of their investment.
Without specific information about the liabilities and assets of Kennedy, it is not possible to determine the precise amount the creditors and investors will receive when the company liquidates.