Firm a Acquires Firm B When Firm B Has a Book

question 34

Multiple Choice

Firm A acquires Firm B when Firm B has a book value of assets of $155 million and a book value of liabilities of $35 million. Firm A actually pays $175 million for Firm B. This purchase would result in goodwill for Firm A equal to ________.

• A)$175 million
• B)$155 million
• C)$120 million
• D)$55 million

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