The Owners of Dallas Electronics Store Are Contemplating Selling the Business

Multiple Choice

The owners of Dallas Electronics Store are contemplating selling the business. The cumulative earnings for the past 5 years totalled $ 900,000, including a gain on discontinued operations of $ 30,000. The annual earnings based on an average rate of return on investment for this industry would have been $ 138,000. If excess earnings are to be capitalized at 15%, then implied goodwill should be

A) $ 210,000.
B) $ 280,000.
C) $ 240,000.
D) $ 870,000.