Valuation of Goodwill 2

While calculating capital employed the following assets are ignored.

• fixed assets

• floating assets

• current assets

• fictitious assets

In case of partnership firms, goodwill is valued at time of

• admission of new partner

• Retirement or death of partner

• change in profit sharing ratio

• all of the above

The present value of the firm’s anticipated excess earnings is

• capital

• Goodwill

• FMP

• super profits

Future maintainable profit – normal profit =

• Average capital employed

• Goodwill

• Super profit

• Capital employed

Capital employed =

• Assets – outside liabilities

• Assets - shareholder funds

• Assets- Current liabilities

• Assets - Long term liabilities

Average Capital Employed is calculated as

• Capital employed-1/2 of current year profit

• Capital employed-1/2 of past year profit

• Capital employed - 1/2 of Average profits

• Capital employed - current year profit

Goodwill is an

• Intangible asset

• Fictitious asset

• Fixed asset

• Current asset

Market rate of return on investment is 12% and rate of risk return on capital invested is 4%. The NRR is

If profits for the last four years was Rs.46,700 Rs. 51,200 Rs.55,000 and Rs.60,000. The average profits are

• Rs.53,225

• Rs.54,000

• Rs. 53,910

• Rs.55,410

Interest on investment is_____________ while calculating future maintainable profit.

• Subtracted

• Added

• Multiplied

• Divided