Psyche Company wants to acquire Trim Company.Trim's ROI has been above average for its industry; net income has averaged $140,000 a year more than the industry average.These "excess" earnings are expected to continue at this amount for 5 years.Assuming a discount rate of 8%, how much goodwill will arise from Psyche's purchase of Trim?

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 Psyche Company wants to acquire Trim Company.Trim's ROI has been above average for its industry; net income has averaged $140,000 a year more than the industry average.These "excess" earnings are expected to continue at this amount for 5 years.Assuming a discount rate of 8%, how much goodwill will arise from Psyche's purchase of Trim?

Psyche Company Wants to Acquire Trim Company