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What is the estimation of goodwill

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Question - Patrick Company is trying to decide whether to acquire Narineh Inc. Patrick Company expects that Narineh will earn approximately $400,000 per year in net income over the next five years. This income is higher than the 14% annual return on assets considered to be the industry norm. If the fair value of Narineh Inc. assets equal to $2,100,000. What is the estimation of goodwill if Patrick is willing to pay for excess earnings for an expected life of 4 years?

Reference no: EM133149347

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