14. Garwood Industries has filed for bankruptcy and will probably be liquidated. The firm’s balance sheet ($ millions) is shown below:

The administrative costs of bankruptcy total $1.6 million. Current assets can be sold for 60% of book value and fixed assets for 25% of book value. Twenty percent of the long-term debt is secured. All of the remaining debt is unsecured. Assume there are no additional costs. How many cents on the dollar will unsecured creditors (including trade creditors) receive on the money owed them?

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Current Assets $ 6.5 Current Liabilities $ 8.5 Fixed Assets (net) Total Assets 30.8 Long-Term Debt 16.5 $37.3 Equity 12.3 Total Liabilities and Equity $37.3