Capitalised Value of Average Profit
= Average Profit x `"Nominal Rate of Return"/"100"`
= RS, 1,00,000 x `frac{10}{100}`
= Rs. 10,00,000.
Capital Employed = Average Profit - external liabilitie
= Rs. (10,00,000 - 1,80,000)
= Rs. 8,20,000.
Goodwill = Capitalised Value of Average Profits - Actual Capital Employed
= Rs, (10,00,000 - 8,20,000)
= Rs. 1,80,000.
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