Enter the total purchase price ($) and the fair value of net assets ($) into the Distribution Cost Calculator. The calculator will evaluate and display the Distribution Cost.
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Distribution Cost Formula
The following formula is used to calculate the Distribution Cost.
DC = PP - FVA
- Where DC is the Distribution Cost ($)
- PP is the total purchase price ($)
- FVA is the fair value of net assets ($)
To calculate the distribution cost, subtract the fair value of net assets from the total purchase price.
How to Calculate Distribution Cost?
The following example problems outline how to calculate Distribution Cost.
Example Problem #1:
- First, determine the total purchase price ($). The total purchase price ($) is given as 9000.
- Next, determine the fair value of net assets ($). The fair value of net assets ($) is provided as 2000.
- Finally, calculate the Distribution Cost using the equation above:
DC = PP – FVA
The values given above are inserted into the equation below:
DC = 9000 – 2000 = 7000 ($)
Example Problem #2:
The variables needed for this problem are provided below:
total purchase price ($) = 10000
fair value of net assets ($) = 7000
Entering these values and solving gives:
DC = 10000 – 7000 = 3000.00 ($)
