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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 aszete: millien
Expected return on net assets for industry: Reported net income for the previous six consecutive years:
Net income for 2020 included a $ 200,000 gain from the sale of a discontinued operation.
-Assuming that excess earnings are expected to continue for 8 years, and ignoring the time value of money, estimated goodwill is
Behavioral Economics
A field of economic study that examines how psychological, cognitive, emotional, cultural, and social factors affect economic decisions of individuals and institutions.
Temptation
The desire to engage in short-term urges for enjoyment, often at the expense of long-term goals.
Prone To Errors
Having a high likelihood of making mistakes or encountering inaccuracies.
Inefficient
A situation or process that does not make the best or most effective use of resources, time, or energy.
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