Question : Under which method of valuation of goodwill, normal rate of return is not considered?
Option 1: Average profit method
Option 2: Capitalisation method
Option 3: Super profit method
Option 4: All of these
Answer (1)
21st Jan, 2024
Correct Answer: Average profit method
Solution : Under the average profit method only, the normal rate of return is not considered under the valuation of goodwill. Hence, the correct option is 1.
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