Use the Following Information for Questions

question 43

Multiple Choice

Use the following information for questions
Jeremiah Inc.is being targeted for acquisition by Argo Corporation.As an analyst for
Argo, you are asked to determine the goodwill that, pending various assumptions, may be inherent in this potential transaction.
The available information relating to Jeremiah includes the following: Current net assets: $5.1 million.
Expected return on net asset for industry: 10%
Reported net income for the previous six consecutive years:

The earnings for 2007 included a $200,000 gain from the sale of a discontinued part of its business.
-Assuming that excess earnings are expected to continue for 8 years, and average excess earnings are discounted at 11%, estimated goodwill is (use interest table)

• A)$1,784,331
• B)$1,661,432
• C)$1,462,356
• D)$1,290,818

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Definitions:

Fraternal Polyandry

A form of marriage in which a woman is married to two or more men who are brothers, practiced in some cultures for economic and societal reasons.

Sororal Polyandry

A form of marriage in which two or more brothers are married to the same wife, specifically among sisters.

Patrilateral Parallel-cousin

A cousin from the father's side of the family who is the child of the father's brother or sister.

Group Marriage

A marriage form in which several men and women have sexual access to one another; also called co-marriage.