The total assets of the business are Rs.7,50,000 and outside liabilities are Rs.2,50,000. Ascertain…

Model: Goodwill: Capitalization of average profit A company has earned an average profit of Rs.60,000 during the last 5 years. The normal rate of return in a similar type of business is 10%. The total assets of the business are Rs.7,50,000 and outside liabilities are Rs.2,50,000. Ascertain the value of goodwill by capitalization method.

 

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