Experienced management increases
Q 17.
Efficiency of management
Favourable location
Longevity of business
Risk involved
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Goodwill is defined as "the present value of a firm's anticipated excess earnings". Thus goodwill exists only when the firm earns super profits. Any firm that earns normal profits or is incurring loss has no goodwill. The factors affecting the value of goodwill are:
1. Nature of business
2. Location of business
3. Efficiency of management
4. Market situation
5. Special advantages
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