Questions Bank 4. The Goodwill is to be valued at two years' purchase of last four years' average profit. The profits were R.O 40,000, R.O 32,000, R.O 15,000 and R.O 13,000 respectively. Find out the value of goodwill 5. Goodwill of a firm is to be valued at two years' purchase of three years' average profits. The profits of the last three years were: 2000 - RO. 30,000, 2001 -RO. 40,000 and 2002 - RO. 35,000. Calculate the amount of goodwill. 6. The average net profits expected in future by Khalifa and Co. are RO. 30,000 per year. The average capital employed in the business by firm is RO. 200,000. The normal rate of return on the capital employed in similar business is 10%. Calculate goodwill of the firm by: 1. Super Profit Method on the basis of two-year purchase 2. Capitalization Method