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What the selling price of the lane company

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Question - The owners of Lane Company are planning to sell its business to new interests. Lane Company believes that the selling price would be for an amount equal to the entity's net assets fair value plus goodwill determined by capitalizing average regular net earnings at 12%. The fair value of Lois Company's net assets was P16,800,000. Cumulative earnings for the past five years amounted to 14,500,000 which includes an expropriation gain of P800,000 from year 2 and a fire loss of P500,000 in year 4. What the selling price of the Lane Company?

Reference no: EM133109380

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