In the example in Section 42.1, goodwill was a positive figure of £50,000. If, instead, it had been a negative figure of £100,000 (being the estimated cost of a marketing campaign that would be necessary to restore customers' faith in the business) at what price would the business be most likely to be sold? Why?

Data From Section 42.1

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42.1 Nature of goodwill Suppose you have been running a business for some years and you want to sell it. How much would you ask as the total sale price of the business? You decide to list how much you could get for each asset if sold separately. This list might be as follows: Buildings Machinery Accounts receivable Inventory 225,000 75,000 60,000 40,000 400,000 Note: if there are any liabilities, you would deduct them from the total value of the assets to arrive at the value of the net assets, which is the net amount you would have left if you sold all the assets and paid off all the creditors. So, if you sold off everything separately, you would expect to receive 400,000.