Question

Total capital employed in the firms is Rs 8,00,000 normal rate of return is 15percent and profit for the year is Rs 1,20,000 value of goodwill as per capitalisation method would be

Answer 1

Explanation:

If the Total Capital Employed in the firm is Rs. 8,00,000; Reasonable Rate of Return is 15% and Profit for the year is Rs. 12,00,000; then the value of Goodwill of the firm as per Capitalisation Method will be Rs. 72,00,000.