The method gives the maximum value for goodwill . Since the contention that super-profit wil law unreasonable, this method is not safe for one to follow. hestration 5 The Net Profit of a business. after providing for uution, for the past five years are: Rs. 80.000, R1.05.00 and Rs. 1.18.000 The capitai employed in the humanes is Rs 1,00,000. The normal rat on this type of business 02 Inserpaciad that the company will be able to maintain its super-profit Calculated the value of goodwill on the basis of
1)5 years purchase of super-profit method . 2)Annuity method, taking the present value of annuity of re 1 for five years at 10% as 3.78 and 3)Capitalisation of super profit method
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2007394952888
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