Question : Capital invested in a firm is Rs. 10,00,000. Normal Rate of Return of 10%. The average profits of the firm are Rs. 1,28,000 (after an abnormal loss of Rs. 8,000). Value of Goodwill at two years' purchase of Super Profit will be
Option 1: Rs. 72,000
Option 2: Rs. 40,000
Option 3: Rs. 2,40,000
Option 4: Rs. 1,80,000
Answer (1)
11th Jan, 2024
Correct Answer: Rs. 72,000
Solution : Answer = Rs 72,000
Actual Average profit = 1,28,000+8000=1,36,000
Normal profit =10,00,000X10%=1,00,000
Super profit =1,36,000-1,00,000=36000
Goodwill =36,000x2= 72,000
Hence, the correct option is 1.
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