Sandhill Homes makes the following computations and assumptions. A. B. Blue, Inc. has identifiable assets with a total fair value of $15,028,000 and liabilities of $8,805,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 75% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Blue, Inc. Blue, Inc's pretax incomes for the years 2022 through 2024 were $1,203,400, $1,500,400, and $952,200, respectively. Sandhill Homes 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 to the following items included in pretax earnings: Depreciation on buildings (each year) C. (a) 961,500 Depreciation on equipment (each year) 54,600 Extraordinary loss (year 2024) 301,300 Sales commissions (each year) 253,300 The normal rate of return on net assets for the industry is 15%. * Your answer is incorrect. Assume further that Sandhill Homes feels that it must earn a 25% return on its investment and that goodwill is determined by capitalizing excess earnings. Based on these assumptions, calculate a reasonable offering price for Blue, Inc. Indicate how much of the price consists of goodwill. Ignore tax effects. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places e.g. 58,971.) $ Goodwill Offering price 5397267 11620267 (b) * Your answer is incorrect. Assume that Sandhill Homes feels that it must earn a 15% return on its investment, but that average excess earnings are to be capitalized for three years only. Based on these assumptions, calculate a reasonable offering price for Blue, Inc. Indicate how much of the price consists of goodwill. Ignore tax effects. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places e.g. 58,971.) Goodwill Offering price +A $ 3080794 9303794