Layout BUCIJ04 Tosk Assessment - Word Reference Mailing Review View Tate antite 5. You must submit your completed i n Via Turdan (available on SULMS) bybelore Saturday 9 May 2PM Question One: Amber Co is considering the purchase of Bravo Co. Amber has collected the following data about TWO Bravo Ca Book Estimated Market values OMR Values OMR Total identifiable ass 585 000 750.000 Total abilities 2200 120 000 Owners equity 2650LC Cumulative total nel cash earnings for the past five years of OMR850 000 includes extraordinary cash gains of OMR67 000 and nonrecurring cash losses of OMR48 000 Amber Co expects a return on its investment of 15%. Assume that Amber prefers to use cash earnings rather than accrual-based earrings to estimate its offering price and that it estimates the total valuation of Bravo to be equal to the present value of cash based earnings (rather than excess eamings) discounted over five years (Goodwill is then computed as the amount implied by the excess of the total valuation over the identifiable net assets valuation) Required 1 Compute (ay an offering price based on the information above that Amber might be Willing to pay and (b) the amount of goodwincluded in that price (3 marks) 2 Compute the amount of goodwl actually recorded, assuming the negotiations result in a final purchase price of OMR625,000 cash (1 mark) Total: 4 marks