The capital of firm is Rs. 80,000. The normal rate of return is 7.5%. If the profit earned by the firm during the last five years is Rs. 8,000, Rs. 9000, Rs. 7000, Rs. 8,500 and Rs. 10,000 then the super profit of the firm will be.
A. Rs. 2,000
B. Rs. 2,500
C. Rs. 3,000
D. Rs. 3,500
Answer: Option B
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Formula of finding Super Profit = Average Profit - Normal Profit
Average Profit = 8000 + 9000 + 7000 + 8500 + 10000 divided by sum of all profit
= 42500 / 5
= 8500
Normal Profit = Capital * Normal Profit ratio 7.5%
= 80000 * 7.5 /100
= 6000
Here, = 8500 - 6000
= 2500
So, the answer (B) is true.
Formula of finding Super Profit = Average Profit - Normal Profit