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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 th value of $22 at Target Co had operating income of $58,300 and net assets with a fair 2,000. Takeover Co. pays $318,000 for Target Co's net assets and business activities Required a. How much goodwill will result from this transaction? Goodwill $ 96,000 b. 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.) ROI 3% c. Caiculate the ROI that Takeover Co, vill earn if the operating income of the acquired net assets continues to be $58,300 (Round your percentage answer to 2 decimal places) RO

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 th value of $22 at Target Co had operating income of $58,300 and net assets with a fair 2,000. Takeover Co. pays $318,000 for Target Co's net assets and business activities Required a. How much goodwill will result from this transaction? Goodwill $ 96,000 b. 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.) ROI 3% c. Caiculate the ROI that Takeover Co, vill earn if the operating income of the acquired net assets continues to be $58,300 (Round your percentage answer to 2 decimal places) RO

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please provide detailed instructions to help me solve this problem .. I’m confused on solving both the ROI. I need the instructions and formulas.

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 th value of $22 at Target Co had operating income of $58,300 and net assets with a fair 2,000. Takeover Co. pays $318,000 for Target Co's net assets and business activities Required a. How much goodwill will result from this transaction? Goodwill $ 96,000 b. 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.) ROI 3% c. Caiculate the ROI that Takeover Co, vill earn if the operating income of the acquired net assets continues to be $58,300 (Round your percentage answer to 2 decimal places) RO
Transcribed Image Text: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 th value of $22 at Target Co had operating income of $58,300 and net assets with a fair 2,000. Takeover Co. pays $318,000 for Target Co's net assets and business activities Required a. How much goodwill will result from this transaction? Goodwill $ 96,000 b. 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.) ROI 3% c. Caiculate the ROI that Takeover Co, vill earn if the operating income of the acquired net assets continues to be $58,300 (Round your percentage answer to 2 decimal places) RO
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