The Owner of Fred's Electronics Is Trying to Sell the Business

question 398

Multiple Choice

The owner of Fred's Electronics is trying to sell the business. The company built a building four years ago at a cost of $2.2 million. The building is currently appraised at $2.46 million. The firm's equipment originally cost $1.2 million and is currently valued at $700,000. The inventory is listed on the statement of financial position at $150,000 but is only worth $125,000. The owner expects to collect 90 % of the $300,000 in accounts receivable. The firm has $14,000 in cash and has total debt of $3.1 million. What is the market value of this firm?

• A) $455,000
• B) $469,000
• C) $499,000
• D) $504,000
• E) $524,000

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Definitions:

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The capability to think logically and solve problems in novel situations, independent of acquired knowledge.

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A construct used in psychology to describe the common intelligence that underlies performance on various cognitive tasks.

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