A company desirous of selling its business to another company has earned an average past profit of $1,60,000 per annum and the same amount of profit is likely to be earned in the future also, except that: (1) Directors' fees of $ 12,000 per annum charged against such profits will not be payable by the purchasing company whose existing Board can manage the new business also. (2) Rent at $ 28,000 per annum which had been paid by the vendor company will not be incurred in the future since the purchasing company owns its own premises and the necessary accommodation can be provided. The net assets, other than goodwill, were $ 18,00,000 and it was considered that a reasonable return on investment in this type of business would be 10%. Calculate the value of Goodwill.