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
B ₹3,00,000
C ₹50,000
D ₹1,50,000
Practice Next

Hey! Ask a query