Economy, asked by aatmaja1922, 11 months ago

Why income from investment deducted from average profit method?

Answers

Answered by Ravispssbp

8

Explanation:

(1) Capitalization of Average Profits; In this method the value of Goodwill is determined by deducting the Actual Capital Employed in the business from the Capitalized Value of Average Profits on the basis of Normal Rate of Return. Step-I Average Profits are ascertained on the basis of Past Few Years' Performance.

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