Sarthaks Test
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Gupta and Bose had a firm in which they had invested Rs.50,000. On an average, the profits where Rs.16,000. The usual rate of earning in the industry is @15%. Goodwill is to be valued at four years’ purchase of profits in excess of profits @15% on the money invested. Value the goodwill.

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Good will = 8,500 x 4 

=Rs 34,000

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