Calculate the value of Goodwill at three years' purchase of the super profit
6. The average profit earned by a firm is 87,000 which includes abnormal income of 7,000 on an average
basis. The capital invested in the business 36,00,000 and the normal rate of return is 12%.
Calculate the value of Goodwill of the firm on the basis of 5 years of super profit.
1st Year 7.000 ; 2nd Year 6,500; 3rd Year 8,000;
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Answer:
How do you calculate goodwill for 3 years?
Average profit = Rs. 5000000/5.
Average profit = Rs. 1000000.
Goodwill = Average profit * No. of year's purchase.
Goodwill = Rs. 1000000 * 3.
Goodwill = Rs. 3000000.
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Answer:
Explanation:
40,000
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