Capital employed by a Partnership firm is ₹5,00,000. Its average profit is ₹60,000. The normal rate of return in similar type of business is 10%. The amount of super profits of the firm will be:-
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹10,000.
Capital employed = ₹5,00,000.
Normal rate of return = 10%
Normal profit = 5,00,000 x 10/100
= 50,000
Average profit = 60,000
Super profit = Average profit - Normal profit
= 60,000 - 50,000
= 10,000