Question : When a similar type of business earns profit at a standard percentage of the Capital employed, it is called __________ .
Option 1: Normal return
Option 2: Interest on loan
Option 3: Interest on drawing
Option 4: Super profit
Correct Answer: Normal return
Solution : Answer = Normal return
When a business consistently earns profits at a standard percentage of its capital employed, it is termed a "normal return." This indicates a stable and predictable performance where the returns align with expectations based on the capital invested, ensuring a regular and expected level of profitability. Hence, the correct option is 1.
Question : Capital invested in the firms business is termed as
Question : ______________shows the relationship of profit (profit before interest and tax) with Capital Employed.
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:
Question : Under the super profit method, goodwill is calculated by
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