Capital Employed Rs.20,00,000, ActualAverage Profit Rs.3,00,000. Normal Rateof Return is 10%. Fromthe above information,Calculate the value ofGoodwill as perCapitalisation of SuperProfit.– About the author Mackenzie
Explanation: super profit =average profit – normal profit normal profit =capital Employed x rate of return _____________ 100 = 20,80,000× 12 ____ 100 = ₹2,40,000 super profit = ₹ 3,00,000 – 2,40,000 value of hwdwill = ₹60,000×100 _____________ 12 = ₹ 5,00,000 Reply
Explanation:
super profit =average profit – normal profit
normal profit =capital Employed
x rate of return
_____________
100
= 20,80,000× 12
____
100
= ₹2,40,000
super profit = ₹ 3,00,000 – 2,40,000
value of hwdwill = ₹60,000×100
_____________
12
= ₹ 5,00,000