BUSINESS COMBINATION

PT Pelangi is considering to buy PT Senyum on January 2, 2019. To determine the purchase price, PT Pelangi considers the following data:

1. Pretax earnings of PT Senyum in 2016,2017,2018 are Rp1.200.000, Rp1.275.000, and Rp1.425.000 respectively. Those pretax earnings are representative to estimate future earnings of PT Senyum.
2. PT Senyum has total asset and liabilities of Rp28.000.000 and Rp18.000.000. Fair value and book value of PT Senyum asset and liabilities are the same except for its machine which is 1.2 times of its book value and vehicle which is 0.85 of its book value.
3. The following data are included in pretax earnings:

Depreciation on machine (each year) Rp 225.000

Depreciation on vehicle (each year) 250.000

Extraordinary gain (2016) 275.000

Extraordinary loss (2017) 550.000

Sales commission each year 250.000

4. Normal rate of return companies in the same industry is 12%. PT Pelangi forecasts that this investment has return on investment of 15%.

Required: (note: round to 2 numbers)

Calculate the targeted earnings, normal earnings, excess earnings, goodwill estimated and implied offering price