In the third stage of the computation of the liquidation value, the liquidation value of _____________ is important.a.Assetsb.Equityc.Incomed.Liabilities

Break Down the Problem

1. Identify what the liquidation value is.
2. Determine the relevance of each option (Assets, Equity, Income, Liabilities) to the computation of liquidation value.

Relevant Concepts

• Liquidation Value refers to the estimated amount that could be obtained if the assets were sold off. It typically considers the values of the assets minus liabilities to determine what is left for equity holders.

Analysis and Detail

1. Assets (a): Refers to everything owned by the entity which will be liquidated.
2. Equity (b): It represents the ownership value after liabilities are settled; however, it is not directly computed separately.
3. Income (c): While important for operational assessments, income does not directly affect liquidation value.
4. Liabilities (d): Critical to determining the net amount available to equity holders after debts have been cleared.

Verify and Summarize

• The liquidation value is fundamentally based on the assets and liabilities of the business. Without accurately assessing assets and liabilities, one cannot determine the true liquidation value.

Final Answer

The liquidation value of a. Assets is most important in the computation of the liquidation value.