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Average profit of GS & Co. is ₹ 50,000 per year. Average capital employed in the business is ₹ 3,00,000. If the normal rate of return on capital employed is 10%, calculate goodwill of the firm by:(i) Super Profit Method at three years' purchase; and(ii) Capitalisation of Super Profit Method. |
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Answer» Average profit of GS & Co. is ₹ 50,000 per year. Average capital employed in the business is ₹ 3,00,000. If the normal rate of return on capital employed is 10%, calculate goodwill of the firm by: (i) Super Profit Method at three years' purchase; and (ii) Capitalisation of Super Profit Method. |
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