Consider a company with net tangible assets valued at $$500,000.$ The company determines the fair rate of return on these assets to be $8\%.$ The company$$s total normalized earnings are estimated to be $$80,000.$ Assuming an appropriate capitalization rate of $10\%.$

a$)$ Calculate earnings on tangible assets.

b$)$ Calculate the value of the business using the excess earnings method $($EEM$)..$