Multiple choice

Average profit is calculated as

  1. total of goodwill / number of years

  2. total products of profits / total of weights

  3. total of profits / number of years

  4. none of above

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

It is used to calculate average profits of a number of  years. For example - the profits in the last three years are Rs 12,000 , Rs 15000, Rs18000. Average Profit = Rs 12,000 + Rs 15,000 + Rs 18,000     = Rs 15,000                                                                                                          3