Average profit of a firm comes as Rs. 54,000 ; Normal profit is Rs. 40,000. Valuation of goodwill under annuity method where value of annuity is 3.78 will be
Answers
Answered by
0
Answer:
Number of years’ purchase = 3
Explanation:
mark as brainlist
Answered by
4
Explanation:
• Valuation of goodwill under annuity method :
- Average profit of a firm = Rs. 54,000
- Normal profit is Rs. 40,000
Goodwill = Super Profit × value of annuity
Super Profit = Average profit - Normal profit
= 54,000 - 40,000
= 14,000
Super Profit = 14,000
Goodwill = Super Profit × value of annuity
= 14,000 × 3.78
= 52,920
Goodwill = 52,920
Hence, Goodwill = 52,920
Similar questions