Question

Total Capital Employed in the firm Rs. 16,00,000. Reasonable Rate of Return 15% Profits for the year Rs. 24,00,000. The value of goodwill using capitalisation method is: *

1 point

Rs. 24,00,000

Rs. 1,64,00,000

Rs. 84,00,000

Rs. 1,44,00,000


what's the correct option.?​

Answer 1

Answer:

144000 is the correct answer

Explanation:

under the capitalisation method of calculating goodwill

1. profit/ rate of return

= 2400000/15%

=16000000

2. goodwill

= 16000000-1600000

=14400000

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