Seller Inc. is in the business of selling Product X. It is evaluating the following options related to acquire 100% of the common shares of Manufacturer Inc. for $ 4,500,000. Comp F is dedicated to manufacture Product X.

Seller owns 100% of the common shares of Comp A (subsidiary) that is dedicated to leasing real property you own, including the building in which Seller operates and the building in which Operates Manufacturer.

Seller's lease fee is $ 323,400 per year; while the Manufacturer is $ 282,300 annually.

The cost to Manufacturer to manufacture Product X is $ 150 per unit.

Seller purchases Product X from another supplier at $ 225 per unit. In case of acquiring the shares Manufacturer commons, Seller would buy all inventory from Manufacturer.

Required: Answer the following questions using the information and financial statements provided. You must justify your answers with calculations and / or financial data. Also, the writing will be evaluated in terms of format, grammar and organization.

1. How the net market value compares to the manufacturer's net book value?
2. How much is the Goodwill of Manufacturer? Please submit your computations.
3. Mention an advantage, in operational terms, for the Seller (including a subsidiary) the acquire the common shares of Manufacturer.
4. Mention a disadvantage, in operational terms, for Seller (including subsidiary) the acquire the common shares of Manufacturer.
5. What impact will acquiring the common shares of Seller have on Seller's financial statements Manufacturer, particularly in the following aspects:
   1. Debt level compared to assets (debt to assets)
   2. Impact on gross profit margin
   3. Impact on net profit

Balance Sheet December 31, 2019 Comp A 135,244 225,182 440,637 Fabricante 66,341 5,450,899 Fair value Fabricante 66,341 5,450,899 Vendedor 377,660 1,272,818 2,084,360 241,786 800,000 205,745 19,948 5,002,317 1,042,205 Cash Accounts receivable Due from affiliates Inventory Investment in affiliate Property and equipment, net Other assets Total assets 1,042,205 2,163,777 34,548 2,999,388 295,909 29,820 6,885,174 503,045 29,820 6,996,149 121,939 15,022 481,382 95,624 Accounts payable Accrued expenses Note payable to stockholder Long-term debt Due to affiliates Total liabilities 653,284 602,233 764,853 1,455,080 440,637 3,916,087 2,272,890 181,537 2,084,360 2,402,858 2,849,896 Common stock, $10 par value Additional paid-in capital Retained earnings/(Deficit) Total stockholders' equity/(deficit) 100,000 102,637 393,893 596,530 150,000 41,036 895,194 1,086,230 120,000 44,837 3,870,441 4,035,278 Total liabilities and stockholders' equity 2,999,388 5,002,317 6,885,174 Income Statement For the year December 31, 2019 Comp A Vededor Fabricante $4,041,914 $ 6,601,524 Revenues: Net sales Rental income Total revenues $ 744,800 744,800 4,041,914 6,601,524 Cost and expenses: Cost of sales Selling, general and administrative expenses Interest expense Total cost and expenses 304,244 144,712 448,956 3,147,650 346,185 215,828 3,709,663 1,834,844 4,444,675 135,654 6,415,173 Net income 295,844 332,251 186,351 Retained earnings at beginning of year 98,049 562,943 3,684,090 Retained earnings/(Deficit) at end of year $ 393,893 $ 895,194 $ 3,870,441 Balance Sheet December 31, 2019 Comp A 135,244 225,182 440,637 Fabricante 66,341 5,450,899 Fair value Fabricante 66,341 5,450,899 Vendedor 377,660 1,272,818 2,084,360 241,786 800,000 205,745 19,948 5,002,317 1,042,205 Cash Accounts receivable Due from affiliates Inventory Investment in affiliate Property and equipment, net Other assets Total assets 1,042,205 2,163,777 34,548 2,999,388 295,909 29,820 6,885,174 503,045 29,820 6,996,149 121,939 15,022 481,382 95,624 Accounts payable Accrued expenses Note payable to stockholder Long-term debt Due to affiliates Total liabilities 653,284 602,233 764,853 1,455,080 440,637 3,916,087 2,272,890 181,537 2,084,360 2,402,858 2,849,896 Common stock, $10 par value Additional paid-in capital Retained earnings/(Deficit) Total stockholders' equity/(deficit) 100,000 102,637 393,893 596,530 150,000 41,036 895,194 1,086,230 120,000 44,837 3,870,441 4,035,278 Total liabilities and stockholders' equity 2,999,388 5,002,317 6,885,174 Income Statement For the year December 31, 2019 Comp A Vededor Fabricante $4,041,914 $ 6,601,524 Revenues: Net sales Rental income Total revenues $ 744,800 744,800 4,041,914 6,601,524 Cost and expenses: Cost of sales Selling, general and administrative expenses Interest expense Total cost and expenses 304,244 144,712 448,956 3,147,650 346,185 215,828 3,709,663 1,834,844 4,444,675 135,654 6,415,173 Net income 295,844 332,251 186,351 Retained earnings at beginning of year 98,049 562,943 3,684,090 Retained earnings/(Deficit) at end of year $ 393,893 $ 895,194 $ 3,870,441