If the fair value of S Co. assets equal to$1,000,000. What is the estimation ofgoodwill if excess earnings areexpected to last indefinitely, but P Co.demands a higher rate of return of 20%because of the risk involved? *$300,000$290,000$310,000None of the answersPage 4 of 6NextClear form

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If the fair value of S Co. assets equal to $1,000,000. What is the estimation of

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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Question

If the fair value of S Co. assets equal to
$1,000,000. What is the estimation of
goodwill if excess earnings are
expected to last indefinitely, but P Co.
demands a higher rate of return of 20%
because of the risk involved? *
$300,000
$290,000
$310,000
None of the answers
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