Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $7.2 million. The machinery can be sold to the Romulans today for $4.05 million. Klingon's current balance sheet shows net fixed assets of $3.5 million, current liabilities of $2.4 million, and net working capital of $520,000. If all the current assets were liquidated today, the company would receive $1.3 million cash.
Required:
(a) What is the book value of Klingon's assets today?
(b) What is the market value?