Impair goodwill on the yogurt brand.The current carrying value of the goodwill is 900.

Assume that Goodwill is the only asset related to the yogurt brand.

Ignore the effect of any tax deduction that may be available for Goodwill impairment.

Matters to Recognize/Record

Possibility 1 - You are optimistic that cash flows will be strong over the next 5 years, after which point, you plan to sell the yogurt brand.Net cash flows for the next 5 years are 100, 100, 100, 100, and 500.Assume net cash flow is available at the end of each year.

Possibility 2 - You are less optimistic about cash flows.Net cash flows for the next 5 years are 100, 90, 80, 70, and 300.Assume net cash flow is available at the end of each year.

The appropriate interest rate is 5%

Select possibility 1 or 2 and apply it to the fictitious financial statements of FFB.Choose between the two options based on your opinions on how well you think yogurt will sell in the future.

1)Which possibility did you chose for goodwill impairment and which possibility did you choose for the acquisition?How did your opinions about the future of yogurt sales and cricket flour affect your choices?Please write about 3 sentences.