Average profit earned by a firm is ₹ 1,00,000 which includes an undervaluation of stock of ₹ 40,000 on an average basis. The capital invested in the business is ₹ 6,30,000 and the normal rate of return is 5% Calculate the goodwill of the firm on the basis of 5 times the super profit.
[Ans.: Goodwill – ₹ 5,42,500]
Solution:-
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I am a M. Com Gold Medalist from Osmania University in 1999. And a UGC NET Qualified in June 1999.
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