Question : The average capital employed in a business is Rs.5,00,000 and the average net profit earned is Rs.65,000. If normal rate of return on capital employed is 8% and remuneration of Rs.20,000 is expected, then the super profit of the concern is:
Option 1: Rs.15,000
Option 2: Rs.5,000
Option 3: Rs.25,000
Option 4: Rs.5,200
Correct Answer: Rs.5,000
Solution :
Average net profit = Rs.65,000
Remuneration = Rs.20,000
Average profit = Average net profit - Remuneration = Rs.65,000 - Rs.20,000 = Rs.45,000
Average capital employed = Rs.5,00,000
Normal rate of return = 8%
Normal profit = Average capital employed X Normal rate of return = Rs.5,00,000 X 8% = Rs.40,000
Super Profit = Average Profit - Normal Profit = Rs.45,000 - Rs.40,000 = Rs.5,000.
Hence, the correct option is 2.
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