Net income figures for Flounder Ltd. are as follows: 2016 - $77,800 2017 - $56,500 2018...

Net income figures for Flounder Ltd. are as follows: 2016 - $77,800 2017 - $56,500 2018 - $86,400 2019 - $90,600 2020 - $71,600 Future income is expected to continue at the average amount of the past five years. The company’s identifiable net assets are appraised at $468,200 on December 31, 2020. The business is to be acquired by Novak Corp. in early 2021. The normal rate of return on net assets for the industry is 9%. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. What amount should Novak Corp. pay for goodwill, and for Flounder Ltd. as a whole, if goodwill is equal to average excess earnings capitalized at 25%? Novak Corp. pay for goodwill $ Novak Corp. pay for Company $ What amount should Novak Corp. pay for goodwill, and for Flounder Ltd. as a whole, if a perpetual 18% return is expected on any amount paid for goodwill? (Round answers to 0 decimal places, e.g. 5,275.) Novak Corp. pay for goodwill $ Novak Corp. pay for Company $ What amount should Novak Corp. pay for goodwill, and for Flounder Ltd. as a whole, if goodwill is equal to five years of excess earnings? (Round answers to 0 decimal places, e.g. 5,275.) Novak Corp. pay for goodwill $ Novak Corp. pay for Company $ What amount should Novak Corp. pay for goodwill, and for Flounder Ltd. as a whole, if goodwill is equal to the present value of five years of excess earnings capitalized at 20%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.) Novak Corp. pay for goodwill $ Novak Corp. pay for Company $

Expert Solution

Year	Income
2016	77800
2017	56500
2018	86400
2019	90600
2020	71600

net assets	468200

		Ans.
1. What amount should Novak Corp. pay for goodwill, and for Flounder Ltd. as a whole, if goodwill is equal to average excess earnings capitalized at 25%?
Novak Corp. pay for goodwill $ Novak Corp. pay for Company $ What amount should Novak Corp. pay for goodwill, and for Flounder Ltd. as a whole, if a perpetual 18% return is expected on any amount paid for goodwill? (Round answers to 0 decimal places, e.g. 5,275.)	$ 84,276
Novak Corp. pay for goodwill $ Novak Corp. pay for Company $ What amount should Novak Corp. pay for goodwill, and for Flounder Ltd. as a whole, if goodwill is equal to five years of excess earnings? (Round answers to 0 decimal places, e.g. 5,275.)	$ 69,570
Novak Corp. pay for goodwill $ Novak Corp. pay for Company $ What amount should Novak Corp. pay for goodwill, and for Flounder Ltd. as a whole, if goodwill is equal to the present value of five years of excess earnings capitalized at 20%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.)	$ 85,920
Novak Corp. pay for goodwill $ Novak Corp. pay for Company $

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