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Determination of Goodwill (An Example) Nigel Corporation is interested in purchasing Luigi Car Company Ltd. The total of Luigi's net income amounts over the last
Determination of Goodwill (An Example) Nigel Corporation is interested in purchasing Luigi Car Company Ltd. The total of Luigi's net income amounts over the last five years is $750,000. During one of those years, Luigi reported a gain on discontinued operations of $94,000. The fair value of Luigi's net identifiable assets is S690,000. A normal rate of return is 15%, and Nigel wants to capitalize excess earnings at 20%. Calculate the estimated value of Luigi's goodvwill
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