Question

Xyz firm earns a profit of 40000 and has invested capital amounting to 200000.In the same class of business normal rate of earning is10%. Calculate Goodwill according to capitalisation method​

Answer 1

Answer:

Goodwill = Normal Capital – Actual Capital

employed

Normal capital= Avg. profit * 100/rate

= 40,000*100/10

= 4,00,000

Actual capital employed =2,00,000

Goodwill= 4,00,000 - 2,00,000

= 2,00,000(ans)

If right Brainlist it.......