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.