The average net profit expected in the future by XYZ firm is ₹ 36,000 per year.

The average capital employed in the business by the firm is ₹ 2,00,000.

The normal rate of return from capital invested in this class of business is 10%.

The remuneration of the partners is estimated to be ₹ 6,000 p.a.

Calculate the value of goodwill on the basis of two years’ purchase of super profit.

[Ans.: Goodwill – ₹ 20,000.]

Anurag Pathak Changed status to publish April 17, 2023