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Question : Total capital employed by a partnership firm is Rs.10,00,000 and its actual average profit is Rs.2,50,000. Normal rate of return is 20% in similar firms working under similar conditions. The firm earns super profit of:

Option 1: Rs.50,000

Option 2: Rs.40,000

Option 3: Rs.30,000

Option 4: Rs.20,000


Team Careers360 3rd Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: Rs.50,000


Solution : Average Profit = Rs.2,50,000.
Normal Profit = Capital employed X Normal rate of return = Rs.10,00,000 X 20% = Rs.2,00,000.
Super Profit = Average Profit - Normal Profit = Rs.2,50,000 - Rs.2,00,000 = Rs.50,000
Hence, the correct option is 1.

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