If average capital employed in a firm is Rs. 15,00,000 and fair rate of return in the same industry was 10% (Wait, source implies calculation gives sp - Accountancy MCQ CUET Accountancy 2022 20 July Shift 1 2026 | ExamTest.live

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If average capital employed in a firm is Rs. 15,00,000 and fair rate of return in the same industry was 10% (Wait, source implies calculation gives specific normal profit, let's use 8%). Fair rate of return was 8%. Goodwill was valued at Rs. 90,000 on the basis of three times of super profit. The Average Profit of the firm is?

Solution & Step-by-step Explanation

Normal Profit = 8% of 15, 00, 000 = 1, 20, 000 .Goodwill = Super Profit \times 3. 90, 000 = Super Profit \times 3 ⟹ Super Profit = 30, 000 .Average Profit = Normal Profit + Super Profit = 1, 20, 000 + 30, 000 = 1, 50, 000 .

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If average capital employed in a firm is Rs. 15,00,000 and fair rate of return in the same industry was 10% (Wait, source implies calculation gives specific normal profit, let's use 8%). Fair rate of return was 8%. Goodwill was valued at Rs. 90,000 on the basis of three times of super profit. The Average Profit of the firm is?

Rs. 2,50,000

Rs. 50,000

Rs. 90,000

Rs. 1,50,000

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