Q4. The capital employed by the firm is 7,00,000. The annual profit of firm is 1,80,000 including 15,000 received as Insurance claim and excluding remuneration partners) *30,000. The normal rate of return of the industry is 15%. Compute goodwill of the firm on the basis capitalisation of super profits and capitalisation of average profits.
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Answer:
Goodwill 200000
Explanation:
180000-15000-30000=135000
135000*100\15=900000
Goodwill=900000-700000=200000
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