Use the Following Information for Questions

question 37

Multiple Choice

Use the following information for questions
Jessup Corp.will acquire a controlling stake in the outstanding shares of Parasol Inc.for
$9.2 million in cash.
-Parasol's average annual net income is $75,000 above the average for Parasol's industry. Assuming Jessup estimates goodwill by capitalizing excess earnings at 14%, the estimate of goodwill is

• A)nil
• B)$1,050,000
• C)$535,714
• D)$954,333

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Definitions:

Theory

An abstract set of ideas or principles that explains phenomena or aspects of the natural or social world.

Radical Behaviorists

Psychologists who follow a doctrine emphasizing the external behaviors of people and their reactions on a given situation, largely ignoring internal processes like cognition.

Behavioral Observations

The method of studying subjects' actions in their natural settings without intervention.

Internal Processes

Internal processes involve the cognitive, psychological, and physiological operations that underlie an individual's mental and emotional functioning.