Black company recently paid $950,000 to acquire Gold company which had an operating income of $240,000 and net assets of $780,000.
Which of the following statements is incorrect?
A. Black has paid $170,000 in goodwill to acquire Gold.
B. Black's purchase of Gold could be due to expected profits in Gold that Black wishes to take part in.
C. The ROI of 31% represents Gold's current operating status.
D. If the operating income of Gold is expected to rise to $280,000 the ROI on Black's investment will be 25%.