8–14. Titanic Corporation reached an agreement with its creditors to voluntarily liquidate its assets and use the proceeds to pay off as much of its liabilities as possible. The firm anticipates that it will be able to sell off its assets in an orderly fashion, realizing as much as 70 percent of the book value of its receivables, 40 percent of its inventory, and 25 percent of its net fixed assets (excluding land).

However, the firm believes that the land on which it is located can be sold for 120 percent of book value. The firm has legal and professional expenses associated with the liquidation process of $2.9 million. The firm has only common stock outstanding. Using Table 8–8, estimate the amount of cash that would remain for the firm’s common shareholders once all assets have been liquidated.

Answer: $1.3 million.