1. (True or False): The replacement cost approach to valuation is likely the best method for a private business whose main assets are intangible assets – customer lists and know-how and expertise.
2 : Paraná Enterprises has agreed to acquire Arape Inc., for $750K subject to a shareholder equity guarantee. At the time of signing the letter of intent, the shareholders’ equity stood at a value of $125K. Up to closing the company earned profits of $75K and paid a dividend of $25K to its shareholders. At closing, how much more or less than the $750K will Paraná Enterprises need to pay at closing?