Market Value versus Book Value Manns Buns Bakery, Inc. balance

sheet lists net fixed asset as $28 million. The fixed assets could currently be sold for

$38 million. Muffins current balance sheet shows current liabilities of $11 million and

net working capital of $9 million. If all the current accounts were liquidated today, the

company would receive $15 million cash after paying $12 million in liabilities.

What is the book value of Manns Buns Bakerys assets today?

What is the market value of these assets?

Formulas Needed:

Step 1. Net working capital (book value) =

Current assets (book value) Current liabilities (book value)

Step 2. Total assets (book value) = Current assets (book value) + Fixed assets (book

value)

Step 3. Net working capital (market value) =

Current assets (market value) Current liabilities (market value)

Step 4. Total assets (market value) =

Current assets (market value) + Fixed assets (market value)