The goodwill of the firm was valued ₹720000 on the basis of 4 years purchase of super profit of the firm. The capital employed of the firm was ₹2500000 and the firm made a profit of ₹480000. Determine the normal rate of return. |
19.2% 12% 7.2% 10% |
12% |
Goodwill = Super profit x No of year purchase |