Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $6.5 million. The machinery can be sold to the Romulans today for $4.25 million. Klingon's current balance sheet shows net fixed assets of $3.1 million, current liabilities of $2.1 million, and net working capital of $560,000. If all the current assets were liquidated today, the company would receive $1 million cash.
Required:
(a) What is the book value of Klingon's assets today?
(b) What is the market value?