What do you mean by super profit?

Total profit/number of years

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Weighted profit /number of years

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Average profit -normal profit

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None

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Solution

The correct option is D Average profit -normal profit
Super profit is the excess of average profits over normal profits. Under this method, goodwill is calculated on the basis of super profits. Normal rate of return on the capital employed is compared with the actual average profits to find out the super profits.

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