A bank acquires a property at foreclosure, and they need to sell it very quickly. They ask an appraiser to provide them a value opinion based on a restricted marketing time, and considering they are under extreme compulsion to sell. Client is asking for Liquidation value.
What is Liquidation value?
The net value of a company's tangible assets, if it were to go out of business and sell its assets, is known as the liquidation value. The worth of the company's real estate, furnishings, equipment, and inventory is the liquidation value. The liquidation value of a corporation does not include intangible assets.
Typically, liquidation value is more than salvage value but less than book value.
Because the seller has to raise as much money as possible quickly, assets are sold at a loss during liquidation. Intangible assets like a company's intellectual property, goodwill, and brand recognition are not included in the liquidation valuation.
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