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diamong [38]
3 years ago
8

Nadine’s Home Fashions has $2.12 million in net working capital. The firm has fixed assets with a book value of $31.64 million a

nd a market value of $33.9 million. The firm has no long-term debt. The Home Centre is buying Nadine’s for $37.5 million in cash. The acquisition will be recorded using the purchase accounting method. What is the amount of goodwill that The Home Centre will record on its balance sheet as a result of this acquisition?​
Business
1 answer:
timofeeve [1]3 years ago
7 0
The amount of goodwill that The Home Centre will record on its balance sheet as a result of this acquisition is $1.48 ($37.5-$ 36.02) million. The amount of goodwill could occur if there is a difference between the investment amount and the net asset of a company. In this problem, we can calculate the company's net asset with this calculation: $2.12+$33.9=$36.02. Fair value amount is used for acquisition accounting using the purchase<span> method.</span>
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Your broker suggests that the stock of DUH is a good purchase at $25. You do an analysis of the firm, determining that the recen
jarptica [38.1K]

Answer:

The correct answer is "$28.03".

Explanation:

The given values are:

Good purchase,

= $25

Dividend,

= $1.40

Annually earning,

= 5%

Beta coefficient,

= 1.3

Treasury bills,

= 1.4%

Now,

= 1.4+1.34\times 8-1.4

= 1.34\times 8

= 10.244 (%)

hence,

The fair value will be:

= 1.4\times \frac{1.05}{.10244}-.05

= 28.03

Absolutely, the proposal including its brokerage must be adopted because as fair market value was almost $25.

5 0
2 years ago
Vonda and Aleiyah are shopping together at the mall for new jeans. Vonda is willing to pay $90 and Aleiyah is willing to pay $50
Gala2k [10]

Answer:

A. $60

Explanation:

Recall that, consumer's surplus refers to the price that a consumer is willing to pay less the amount he or she actually pays.

Thus

Consumer surplus = maximum price willing to pay - actual market price.

Given that

Market price = $40

Vonda is willing to pay = $90

Aleiyah is willing to pay = $50

Hence.

Vonda consumer surplus = 90 - 40

= $50

Aleiyah consumer surplus = 50 - 40

= $10.

Total consumer surplus = 50 + 10

= $60.

8 0
3 years ago
A political leader suggesting that an economic downturn will be cushioned by nondiscretionary fiscal policy is referring to:____
pishuonlain [190]

Answer:

Option A is the correct approach.

Explanation:

  • This is indeed a connection to compulsory tax and government expense stabilizers which weren't at the discretion including its government. Throughout the event of a recession, expenses are cut, rising discretionary income to something like the extent that the economic depression is pacified.
  • Unemployment insurance, as well as other social programs, are consequently expanded without the clear intervention of the government

The other options offered are also not relevant to the scenario presented. So, the solution above is the right one.

5 0
3 years ago
Protective covenants: Group of answer choices a.only apply to bonds that have a deferred call provision. b.are primarily designe
tiny-mole [99]

Answer:

B. are primarily designed to protect bondholders

Explanation:

Protective covenants are designed primarily to protect bondholders from future actions of bond issuer. They are also part of a loan agreement that limits certain actions a company may take during the course of the loan to protect the person who lend the money interests. They provide extra protection for the investors. Creditors use it to protect their interests by restricting certain activities of the issuer that could endanger the creditor's interest.

4 0
3 years ago
Read 2 more answers
Which of the following scenarios demonstrates the leverage effect on net operating income due to the existence of fixed costs?
morpeh [17]

Answer:

C) A 25% increase in sales resulting in a 30% increase in net operating income.

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