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A business has earned average profit of 4,00,000 during the last few years and the normal rate of return in similar business is 10%. Find value of goodwill by:

i Capitalisation of Super Profit Method, and

ii Super Profit Method if the goodwill is valued at 3 years' purchase of super profits. Assets of the business were 40,00,000 and its external liabilities 7,20,000.

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By: NIHARIKA WALIA

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