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If profits of recent years are steadily increasing which average method may be more suitable for goodwill valuation?

Answer and explanation

Correct answer: Weighted average profit method

When profits are increasing giving more weight to recent years gives a better picture. So weighted average method may be more suitable.

Related tags

Weighted AverageValuation ReasoningConceptGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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