average profit is 500000. capital employeed 4000000 normal rate of return 8% the value of goodwill on the basis of capitalisation of super profit is
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Answer:
Goodwill = Rs. 22,50,000
Explanation:
Given , Avg profit = Rs.5,00,000
Normal profit. = Capital Employed X Normal Rate of Return
= 40,00,000 X 8/100
= Rs. 3,20,000
Super profit = Avg profit - Normal Profit
= 5,00,000 - 3,20,000
= Rs. 1,80,000
Goodwill. = Super profit / Normal Rate of Return X 100
= 1,80,000/8 X 100
= Rs. 22, 50,000
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