The net profits of a business, after providing for income tax for the last 5 years...
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The net profits of a business, after providing for income tax for the last 5 years were: Rs. 80, 000, Rs. 1, 00, 000, Rs. 1, 20, 000, Rs. 1,25,000 and Rs. 2,00,000 respectively. The capital employed in the business is Rs. 10,00, 000 and the normal rate of return is 10%. Calculate the value of the goodwill on the basis of the annuity method taking the present value of annuity of Rs. 1 for 5 years at 10% is 3.7907. The net profits of a business, after providing for income tax for the last 5 years were: Rs. 80, 000, Rs. 1, 00, 000, Rs. 1, 20, 000, Rs. 1,25,000 and Rs. 2,00,000 respectively. The capital employed in the business is Rs. 10,00, 000 and the normal rate of return is 10%. Calculate the value of the goodwill on the basis of the annuity method taking the present value of annuity of Rs. 1 for 5 years at 10% is 3.7907.
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Rs 94768 Capital employed in the business is Rs 1000000 Normal Profit Capital Employ... View the full answer
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Posted Date:
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