Question $17$

Firm A has $$2$ million in net working capital. The firm has fixed assets with a book value of

$$28$ million and a market value of $$35$ million. The firm has no long$-$term debt. Firm $B$ is

buying Firm A for $$39$ million in cash. The acquisition will be recorded using the purchase

accounting method. What is the amount of goodwill that Firm B will record on its balance

sheet as a result of this acquisition?

$$3$ million

$$2$ million

$$4$ million

$$8$ million

$$6$ million