Model: Computation of expected rate of return X Ltd’s financial position is as follows:
|
(a) Sundry assets |
40,00,000 |
|
(b) Current liabilities |
4,50,000 |
|
(c) Average net profit of the last 4 years |
4,82,000 |
|
(d) Average capital employed |
36,00,000 |
|
(e) Managers’ average annual remuneration |
72,000 |
|
(f) The goodwill valued at 4 year’s purchase |
2,00,000 |
|
Price of super profits |
|
|
Compute the expected rate of return. |