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    Question

    XYZ & co is a partnership firm that has been operating

    for five years. The firm has consistently achieved average annual profits of ₹1,00,000. The capital employed in the business is ₹5,00,000. The partners estimated a normal rate of return of 10% for businesses in the same industry. Calculate the goodwill of the firm being 3 years' purchase of super profit.
    A ₹2,50,000 Correct Answer Incorrect Answer
    B ₹3,00,000 Correct Answer Incorrect Answer
    C ₹50,000 Correct Answer Incorrect Answer
    D ₹1,50,000 Correct Answer Incorrect Answer

    Solution

    The correct answer is D

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