Average profit, Superprofit and Capital employed of a firm are ₹15,60,000; ₹4,80,000; and ₹90,00,000 respectively. Normal rate of return is 12%. The value of goodwill on the basis of capitalization of 'Average Profit' an

CS Executive · Corporate and Management Accounting · PYQS · December 2019
Average profit, Superprofit and Capital employed of a firm are ₹15,60,000; ₹4,80,000; and ₹90,00,000 respectively. Normal rate of return is 12%. The value of goodwill on the basis of capitalization of 'Average Profit' and of 'Superprofit' will be :
(A) 130 Lakh and 40 Lakh
(B) 1,87,200 and 57,600
(C) 130 Lakh and 11,37,600
(D) 40 Lakh and 40 Lakh

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Valuation

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