1)The management of Magic Mobile Homes has proposed to reorganize the firm. The proposal is based on a going-concern value of $2.0 million. The proposed financial structure is $750,000 in new mortgage debt, $250,000 in subordinated debt and $1,000,000 in new equity. All creditors, both secured and unsecured, are owed $2.5 million dollars. Secured creditors have a mortgage lien for $1,500,000 on the factory. The corporate tax rate is 34%.

How much should the unsecured creditors receive?

$1,000,000.

$500,000.

$750,000.

$667,000.

answer is 500000. please explain why