Ivanhoe Company is considering the acquisition of Tamarisk, Inc. To assess the amount it might be willing to pay, Ivanhoe makes the following computations and assumptions.

A$.$ Tamarisk, Inc. has identifiable assets with a total fair value of $$6,022,000$ and liabilities of $$3,702,000.$ The assets include office equipment with a fair value approximating book value, buildings with a fair value $25\%$ higher than book value, and land with a fair value $50\%$ higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Tamarisk, Inc.

B$.$ Tamarisk, Inc's pretax incomes for the years $2020$ through $2022$ were $$470,200,$$$570,200,$ and $$373,800,$ respectively. Ivanhoe 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 for the following items included in pretax earnings:

$\backslash$table$[[$Depreciation on Buildings $($each year$),381,300],[$Depreciation on Equipment $($each year$),32,500],[$Extraordinary Loss $($year $2022),134,400],[$Salary Expense $($each year$),172,000]]$

C$.$ The normal rate of return on net assets for the industry is $15\%.$

$($a$)$

Assume that Ivanhoe feels that it must earn a $20\%$ return on its investment, and that goodwill is determined by capitalizing excess earnings. Based on these assumptions, calculate a reasonable offering price for Tamarisk, Inc. Indicate how much of the price consists of goodwill. $($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answers to $0$ decimal places e$.$g$.58,971.)$

Goodwill

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