Question

(D) Rs. 3,900
Q.17 The average capital employed in a business is Rs. 5,00,000 and the average net profit eared is Rs.
65,000. If the normal rate of return on capital employed is 8% and a remuneration of Rs. 20.000 is
expected, then the super profit of the concern is:
(A) Rs. 15.000
(B) Rs. 5,000
(C) Rs. 25,000
(D) Rs. 5,200​

Answer 1

Given:

• The average capital of a firm is Rs 5,00,000.
• The average net profit is Rs 65,000.
• The NRR [Normal Rate of Return] is 8%.
• A remuneration of Rs 20,000 is expected.

To find: The super profit.

Answer:

Average profit = Average net profit - Remuneration

Average profit = Rs 65,000 - Rs 20,000

Average profit = Rs 45,000

Normal profit = Capital employed × (NRR ÷ 100)

Normal profit = Rs 5,00,000 × (8 ÷ 100)

Normal profit = Rs 40,000

Super profit = Average profit - Normal profit

Super profit = Rs 45,000 - Rs 40,000

Super profit = Rs 5,000

Therefore, the super profit of the firm is (B) Rs 5,000.