J. Klaus has devoted years to building a profitable business that earns an attractive return. Now Klaus is considering the possibility of selling the business and is attempting to estimate the value of goodwill in the business. The recorded net assets of the business (excluding goodwill) amount to \(\$ 225,000\), and in a typical year, net income amounts to \(\$ 40,500\). Most businesses of this type are expected to earn a return of about \(15 \%\) on net assets. Calculate goodwill assuming

(a) the amount of goodwill is estimated to be six times the portion of earnings that are above average, and

(b) the amount of goodwill is estimated by capitalizing aboveaverage earnings at a rate of \(12 \%\).