Calculate the value of goodwill from the information given on the following basis:
(a) Three year’s purchase of average profits of last five years.
(b) Capitalization of super profits.
Profit for the last five years: 2014- ` 40,000; 2015- ` 75,000; 2016- ` 50,000;
2017- ` 1,35,000; 2018- ` 1,00,000.
Average capital employed is ` 2,00,000 and the normal rate of return is 20 %.
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