1.

From the following information, calculate value of goodwill of the firm by applying Capitalisation Method: Total Capital of the firm ₹ 16,00,000. Normal rate of return 10%. Profit for the year ₹ 2,00,000.

Answer»

n:Goodwill = Capitalised Value of PROFIT - Actual Capital Capitalised Value of Profit =                                              =                                             =20,00,000  TOTAL Capital =16,00,000 Goodwill = 20, 00, 000 - 16, 00, 000 = 4, 00, 000



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