Question

a firm earn Rs. 100000. the normal rate of return is 10%. the assets of the company amounted to Rs. 110000 and liabilities to Rs. 100000. value of good will by the capitalisation of average actual profit will be
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Answer 1

Answer:

capitalized value = 1,00,000×100/10 = 10,00,000

net assets = 1,10,000-1,00,000 = 10,000

goodwill = 10,00,000 - 10,000 = 9,90,000