Calculate value of goodwill under annuity of super profits

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Question - Calculate the value of goodwill under annuity of super profits, from the following information:

a) Net profit for the last five years : Rs.40,000 ; Rs.42,000 ; Rs.45,000 ; Rs.46,000 and Rs.47,000.

b) Capital employed in the business Rs.4,00,000.

c) Reasonable rate of expected returns on capital - 10%.

d) Present value of annuity of one rupee for five years at 10 percent interest as Rs.3.78.

Reference no: EM132202292

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