Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $60,800 and net assets with a fair value of $200,000. Takeover Co. pays $328,000 for Target Co's net assets and business activities Required: a. How much goodwill will result from this transaction? Goodwill b. Calculate the ROI for Target Co. based on its present operating income and the fair value of its net assets. (Round your percentage answer to 2 decimal places.) ROI % c. Calculate the ROI that Takeover Co, will earn if the operating income of the acquired net assets continues to be $60,800. (Round your percentnge answer to 2 decimel pleces.) RO d. Takeover Co. is willing to pay $128,000 more than fair value for the net assets acquired from Target Co as it represents goodwill and the expected superior earnings in future years True OFalse Alpha Inc. and Beta Co. are sheet metal processors that supply component parts for consumer product manufacturers. Alpha has been in business since 1985 and is operating in its original plant facilities. Much of its equipment was acquired in the 80s and 90s. Beta Co. was started two years ago and acquired its building and equipment then. Each firm has about the same sales revenue, and material and labor costs are about the same for each firm Required: a. What would you expect Alpha's ROI to be relative to the ROI of Beta Co? Higher No change O Lower b. What are the implications of this ROI difference for a firm seeking to enter an established industry? The implication for Beta Co. is that because of its lower ROI, its ability to raise capital will be increased The implication for Beta Co. is that because of its higher ROI, its ability to raise capital will be increased O The implication for Beta Co. is that because of its higher ROI, its ability to raise capital will be reduced The implication for Beta Co. is that because of its lower ROI, its ability to raise capital will be reduced