Multiple Choice
Magic Mobile Homes is to be liquidated. All creditors,both secured and unsecured,are owed $2 million. Administrative costs of liquidation and wage payments are expected to be $500,000. A sale of assets is expected to bring $1.8 million after taxes. Secured creditors have a mortgage lien for $1,200,000 on the factory which will be liquidated for $900,000 out of the sale proceeds. The corporate tax rate is 34%. How much and what percentage of their claim will the secured creditors receive,in total?
A) $900,000; 75%
B) $981,818; 81.82%
C) $1,009,091; 84.1%
D) $1,200,000; 100%
E) Not enough information to answer.
Correct Answer:
Verified
Correct Answer:
Verified
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