. If average capital employed in a firm is 8,00,000, average of actual profits is 1,80,000 and normal rate of return is 10%, then value of goodwill as per capitalization of average profits is
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Answered by
4
Answer:
10,00,000
Step-by-step explanation:
Average capital employed = ₹8,00,000
Average of actual profits = ₹1,80,000
Normal rate of return = 10%
Capitalized average profits = Average profits x 100/Normal rate of return
= ₹1,80,000 x 100/10
= ₹18,00,000
Value of goodwill = Capitalized average profits - Average capital employed
= ₹18,00,000 - ₹8,00,000
= ₹10,00,000
Answered by
1
Answer:
30000000 is the right answer
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