Question: Market Values and Book Values Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $7 million. The machinery can be sold to the

Market Values and Book Values Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $7 million. The machinery can be sold to the Romulans today for $3.7 million. Klingon’s current balance sheet shows net fixed assets of $2.6 million, current liabilities of $1.3 million, and net working capital of $410,000. If all the current assets were liquidated today, the company would receive $1.8 million cash. What is the book value of Klingon’s assets today? What is the market value?

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