Question

2. 10. (A) The capital of a firm is Rs. 8,00,000 and it earns an average annual
profit Rs. 90,000. The normal rate of profit in this type of business %. If good-
will be equal to capital value of superprofit. Calculate the goodwill of the firm.
(MP. 2019)​

Answer 1

Answer:

total capital= 800000

average profit= 90000

normal rate of profit 10%

then normal profit = 800000* 10%

= 80000

super profit = 90000-80000=10000

Goodwill = super profit= 10000