The net profits of a partnership business, after providing for income tax for the last five years were : Rs. 80,000; Rs. 1,00,000; Rs. 1,20,000; Rs. 1,25,000 and Rs. 2,00,000. The capital employed in the business is Rs. 10,00,000 and the normal rate of return is 10%. The value of goodwill on the basis of the annuity method; taking the present value of the annuity of Re 1 for 5 years at 10% is 3.7907 (approx); will be
1
Rs. 2,500 (approx)
2
Rs. 79,225 (approx)
3
Rs. 94,770 (approx)
4
Rs. 2,25,000 (approx)