Question

Average profit earned by a firm is rupees 100000 which includes undervaluation of stock of rupees 40000 on an average business the capital invested in the business is rupees 637000 and is a normal rate of return is 5% calculate goodwill of the firm on the basis of hand 5 times does oppa super profit

Answer 1

Answer:

adjusted avg profit = 1,00,000-40,000=60,000

normal profit = 6,37,000*5%= 31,875

super profit = 60,000-31,875 = 28,125

Goodwill =28,125*5=1,40,625