33 :- Average profit of a firm during the last few years is Rs 1,50,000. In similar business, the normal rate of return is 10% of the capital employed. Calculate the value of goodwill by capitalization of super profit method if super profits of the firm are Rs 50,000.
Solution:-
Calculation of goodwill by capitalization of super profits
Goodwill = Super profit x Normal rate of return
= 50,000 x 100/10
= Rs 5,00,000