Pier 5 Has Been in Business 8 Years with 4

question 106

Short Answer

Pier 5 has been in business 8 years with 4 stores in the San Francisco bay area.Their local reputation for making savory pies such as curried potatoes is well recognized.A national food distributor has offered to purchase the company.Pier 5 has $0.9 million of net assets at book value,but those net assets have a fair market value of $1.2 million.If the distributor offers to buy Pier 5 for $3.5 million,how much will be recorded as goodwill based on the offered purchase price?

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Definitions:

The Intercept

In the context of linear regression, it represents the value of the dependent variable when all independent variables are zero.

Predicted Point

An estimated value derived from a statistical model indicating where a data point should fall based on the model's parameters.

Regression Line

A line drawn through a scatter plot of data points that best expresses the linear relationship between those points.

Direction

Refers to the course along which something moves or faces, often used in statistical analysis to describe trends.