Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $64,900 and net assets with a fair value of $190,000. Takeover Co. pays $283,000 for Target Co.'s net assets and business activities.
1. How much goodwill will result from this transaction?
2. Calculate the ROI for Target Co. based on its present operating income and the fair value of its net assets. (Round your percentage answer to 2 decimal places.)
3. Calculate the ROI that Takeover Co. will earn if the operating income of the acquired net assets continues to be $64,900. (Round your percentage answer to 2 decimal places.)
Answers: 3
Other questions on the subject: Business
Business, 22.06.2019 21:40, mackenziemelton26
Which of the following is one of the main causes of inflation? a. wages drop so workers have to spend a higher percentage of income on necessities. b. demand drops and forces producers to charge more to meet their costs. c. rising unemployment cuts into national income. d. consumers demand goods faster than they can be supplied.
Answers: 3
Business, 22.06.2019 23:30, frankgore8496
What are consequences of rapid inflation? (select all that apply.) savings accounts become less desirable because interest earned is lower than inflation individual purchasing power increases, which results in an increase in demand. individual purchasing power decreases, which results in a decrease in demand. people postpone purchasing expensive items, such as homes, until prices drop.
Answers: 1
Business, 23.06.2019 00:00, JayceMeyers06
The undress company produces a dress that women use to quickly and easily change in public. the company is just over a year old and has been successful through a kickstarter campaign. the undress company has identified a customer segment, but if it wants to reach a larger customer segment market outside of the kickstarter family, what question must it answer?
Answers: 1
You know the right answer?
Goodwill arises when one firm acquires the net assets of another firm and pays more for those net as...
Questions in other subjects:
Computers and Technology, 28.04.2021 03:10
Chemistry, 28.04.2021 03:10
Mathematics, 28.04.2021 03:10
