If Average Capital Employed in a firm is ₹9,00,000; Average Profits ₹2,80,000 and Normal rate of return is 20%, then value of goodwill as per capitalisation of super profits is:

₹5,00,000

Normal profit = Average capital employed x Normal rate of return/100
                      = 900000 x 20/100
                     = ₹180000
Super profit = Average profit -Normal profit
                    = 280000 -180000
                    = ₹100000
Goodwill as per capitalisation of super profit = Super profit x 100/ Normal rate of return
                                                                      = 100000 X 100/20
                                                                      = ₹500000