Goodwill Is an Asset That Arises Because the Present Value

question 20

Multiple Choice

Goodwill is an asset that arises because the present value of an acquired company's estimated future earnings, discounted at the acquiring firm's ROI:

• A)is less than the fair value of the net assets of the acquired company.
• B)is more than the fair value of the net assets of the acquired company.
• C)is more than the fair value of the net assets of the acquiring company.
• D)is less than the fair value of the net assets of the acquiring company.

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Definitions:

Genetic Factors

Refers to the traits and conditions determined by an individual's genes and hereditary influence.

Mental Flexibility

The cognitive ability to switch between thinking about two different concepts, or to think about multiple concepts simultaneously.

Stress

A physical or psychological response to internal or external pressures or threats, often characterized by feelings of tension and anxiety.

Intellectual Disability

A disability characterized by significant limitations both in intellectual functioning and in adaptive behavior, which covers many everyday social and practical skills.