"This way, Miss Mills."

The handsome stranger stood in the stairwell with a flickering candle. His sonorous voice echoed against the walls, and Diane felt as though she were in a cave. There was an eerie glow to his face, lit from below by the flame.

"I hope you don't mind," he said, "my taking the liberty of lighting the way for you."

"Don't worry," she said. "No one takes a liberty with me unless I let them. Where are we going?"

"Up to the roof," he said, the shadows dancing wildly on the wall as they ascended the metal staircase. "It's where I go to gather my thoughts. And they say there's a comet passing overhead tonight."

"Well I don't care about comets. But I wouldn't mind some air."

He stopped and stared at her as she passed him. She felt hot, and dizzy, and was sure she was breaking out in a sweat, but said nothing. Diane Mills, flapper, was not about to let on that she felt any kind of weaknesss. She could feel his presence behind her, and when she stumbled, she felt his hand on her back, steady and steadying, in an instant.

Outside on the roof the air was thick and close -- a New York City dog-summer's night. Papers swirled in the breeze on the desolate rooftop, and on the horizon were flashes of heat lightning. Diane felt as if this place was what she felt suddenly to be inside her: disoriented, out of joint, silent, somehow altered.

He tapped against a rusted old water tower. "This old thing is due to be replaced," he said. "It's been here since the turn of the century."

"And how would you know?" she asked him.

"I own the building."

"You mean --"

"That's right. I'm the one that Pete pays rent to. I have some real estate holdings. I'm surprised you weren't interested in Pete's little proposition. You could make a pretty living"

"Don't tell me you're going to work on me now," she said, gazing up at the sky, feeling more confused with every word that passed her lips. "I don't see any comet."

"Look here," he said, sitting her down on the low, crumbling wall that ringed the roof. "The Split has quite a name. People all over town know about it. There's value in that, you know. This place has quite a bit of goodwill built into it."

"Goodwill?" said Diane. "I see plenty to drink. I see the regulars, and people after a good time. But I wouldn't exactly call it that. That's a funny word to use."

He laughed. "Now..." He took her arm and sat her down on the low wall that ringed the roof. "You aren't scared of heights, are you?"

"No."

"Good. Fear is a bad thing. Do you know what a-mortize means? It means to bring towards death."

"Well, I couldn't care less about that." She felt a sudden chill, and the world began to spin...

"And, Miss Mills, you can a-mortize the goodwill costs of this place. That makes it a better deal yet. There. How can you resist? I don't think you can."

His face was so close to her -- she felt as if he was about to kiss her, and there was nothing she could do about it. She felt the wall crumbling beneath her. The last thing she saw was a flash of light -- she wondered if that was the comet in the sky... or a flash of heat lightning...

She felt herself free-falling through space, and what went through her head was: how can this be? My life is about to end now? She thought suddenly of a water garden she used to visit as a girl, and of some white blossoms on it. And crushing upon that thought, a looming, monstrous reflection on that water, was the face of the man on the roof. As her body twisted and turned in free-fall, she caught sight below her of the staggering form of the motley-clad drunk, weaving down the street, singing a tuneless song.

"Intangible you, intangible you....

A dream, through and through..."

Goodwill? What was that? The word meant nothing to her. Yet she had somehow lost her will, to this man, to this power. A question consumed her, clear as crystal, in what looked to be her final moments on this earth:

What is goodwill?

You answer her for her, Tipster-Busters, and attempt to save her from a horrible fate!

1) An enhancement to earnings

2) An asset accounting for cost in excess of book value

3) A liability that eventually is charged off the balance sheet

4) The value of earnings retained and reinvested in a business

Enter your selection in the field to the lower right, and get immediate feedback on the answer!

The answer is 2)

Goodwill is an asset that arises from the purchase of one business by another. When a company acquires another and the purchase price of that business is higher than the net asset value of the acquired business, the difference is transferred into an asset called "goodwill" when the two consolidate. (You can think of net asset value, or book value, as a business's net worth.)

If Coca Cola were to be acquired, for instance, it's highly doubtful that the company would be priced at its book value. In that book value, the name "Coke" -- its brand equity -- cannot be found. The company acquiring Coke would have to chalk up the amount it paid above the company's net asset value to goodwill, and amortize that asset over 40 years, one quarter at a time. When Mat Lomen spoke of the fact that people know The Split, that its name has value, he was referring to The Split having brand equity. He may indeed be right about that, but the amount of the goodwill depends entirely on the purchase price Miss Mills could negotiate.

And how does goodwill fit into this week's subject, cost of sales? For that, dear reader, you'll want to catch up with our adventures later this week!

Miss Mills, meanwhile, in a state of free-fall, was not in a position to negotiate anything. The last thing she saw, gulping air, flailing, horrified, was the lettering on the canopy below her, lit brightly by a flash of heat lightning:

"Cafe of the MoMent."

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