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Average profit Rs. 1,00,000, normal return 10%, net assets Rs. 8,20,000. Goodwill by capitalisation?
ARs. 2,80,000
BRs. 10,00,000
CRs. 8,20,000
DRs. 1,80,000
Answer & Solution
Correct answer: D. Rs. 1,80,000
Capitalised value is 1,00,000 divided by 10% = 10,00,000, and less net assets of 8,20,000 leaves 1,80,000.
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