Question

Goodwill of the firm on the basis of 2 years purchase of average profit of the last 3 years is Rs 25000. Find average profit.

Answer 1

Answer:

16.667

Explanation:

Answer 2

GIVEN : Goodwill of the firm is 25,000 ; Purchase year is 2

TO FIND : Average Profit

SOLUTION :

Goodwill = Average Profit × Number of year purchased

25,000 =  Average Profit × 2

As we have to find average profit so let it be x.

$\frac{25000}{2}$ = Average Profit

12,500 = x

Average Profit is 12,500 .

Average profit of the firm is 12,500 .