Book and liquidation value The balance sheet for Macadamia Industries is as follows.

Additional information with respect to the firm is available:
(1) Accounts receivable and inventories can be liquidated at 95% of book value.
(2) The firm has 10,000 shares of common stock outstanding.
(3) Preferred stock can be liquidated at book value.
(4) All interest and dividends are currently paid up.
(5) Land and buildings can be liquidated at 150% of book value.
(6) Machinery and equipment can be liquidated at 80% of book value.
(7) Cash and marketable securities can be liquidated at the book value.
Using the information provided, answer the following:

a. What is Macadamia Industries’ book value per share?

b. What is its liquidation value per share?

c. Compare, contrast, and discuss the values found in parts a and b.

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Macadamia Industries Balance Sheet as of December 31 Assets Cash Marketable securities Accounts receivable Inventories Total current assets Land and buildings (net) Machinery and equipment Total fixed assets (net) Total assets 80,000 120,000 240,000 320,000 760,000 300,000 500,000 800,000 1,560,000 Liabilities and stockholders' equity Accounts payable Notes payable Accrued wages Total current liabilities Long-term debt Preferred stock Common stock Retained earnings Total liabilities and stockholders' equity 200,000 60,000 60,000 320,000 360,000 160,000 520,000 200,000 1,560,000