Any firm that earns normal profits or is incurring losses has..........

No goodwill

The correct answer is option 3- No goodwill.

Any firm that earns normal profits or is incurring losses has no goodwill.

Goodwill can be defined as “the present value of a firm’s anticipated excess earnings” or as “the capitalised value attached to the differential profit capacity of a business”. Thus, goodwill exists only when the firm earns super profits. Any firm that earns normal profits or is incurring losses has no goodwill.