Microsoft Word peachtree case study
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| 2.4 Liquidation Value Liquidation value is chosen as the premise of value when there is a liquidation plan in place, liquidation is determined to be imminent, or it is believed that the business has greater value if its individual assets are sold, either en masse or separately, to the highest bidder. The necessary result of this process is that the company ceases to be a going concern. Shannon Pratt, an oft‐cited business appraisal professional, comments as follows Page 21 of 141 liquidation value is, in essence, the antithesis of going‐concern value. Liquidation value means the net amount the owner can realize if the business is terminated and the assets sold off in piecemeal … it is essential to recognize all costs associated with the enterprise’s liquidation. These costs normally include commissions, the administrative costs of keeping the Company alive until the liquidation is completed, taxes and legal and accounting costs. Also in computing the present value of a business on a liquidation basis, it is necessary to discount the estimated net proceeds at a rate reflecting the risk involved 5 Pratt sums up liquidation value, the liquidation value of the business as a whole normally is less than the sum of the liquidation proceeds of the underlying assets.” 6 Download 0.84 Mb. Share with your friends:
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