Suppose an Acquiring Firm Pays $100 Million for a Target

Multiple Choice

Suppose an acquiring firm pays $100 million for a target firm and the target's assets have a book value of $70 million and an estimated replacement value of $80 million.What amount would be allocated to the acquiring firm's goodwill account?

A) $0 million
B) $20 million
C) $30 million
D) $70 million
E) $80 million