Under the capitalisation method, goodwill is calculated by _____.
A. Super profit x number of years’ purchase
B. Total of the discounted value of expected future benefits
C. Super profit – (r) expected rate of return
D. Average profit x number of years’ purchase
Answer:C
Under the capitalisation method, goodwill is calculated by _____.
A. Super profit x number of years’ purchase B. Total of the discounted value of expected future benefits C. Super profit – (r) expected rate of return D. Average profit x number of years’ purchase