Further adding to this question, now, assume that Plantation Homes Company feels it must earn 15% return on investment, but that average excess earnings are to be capitalized for 3 years only. Based on these assumptions, calculate the goodwill and reasonable offering price for Condominiums, Inc.

Cullumber Homes Company is considering the acquisition of Vaughn, Inc. early in 2025 . To assess the amount, it might be willing to pay, Cullumber Homes makes the following computations and assumptions. A. Vaughn, Inc. has identifiable assets with a total fair value of $15,020,000 and liabilities of $8,811,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 75% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Vaughn, Inc. B. Vaughn, Inc.'s pretax incomes for the years 2022 through 2024 were $1,200,500,$1,500,500, and $954,800, respectively. Cullumber Homes believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments to the following items included in pretax earnings: C. The normal rate of return on net assets for the industry is 15%