Profits are ₹60000 ₹90000 and ₹120000 with weights 1:2:3. What is goodwill at 3 years purchase of weighted average profit?

Correct answer: ₹300000

The direct answer is C, ₹300,000. For weighted average profit, multiply each profit by its weight, add the weighted profits, and divide by the total of the weights. The products are ₹60,000 × 1 = ₹60,000, ₹90,000 × 2 = ₹180,000, and ₹120,000 × 3 = ₹360,000. Their total is ₹600,000. The total weight is 1 + 2 + 3 = 6. Weighted average profit = ₹600,000/6 = ₹100,000. Goodwill at three years’ purchase = ₹100,000 × 3 = ₹300,000. Option C is correct. Option A, ₹200,000, uses only two years’ purchase. Option B, ₹250,000, does not follow the stated weighted calculation. Option D, ₹360,000, is not three times the correct average; it is merely one possible distractor based on an incorrect computation. The important point is that higher weights give greater influence to the corresponding profits. Memory cue: multiply, add, divide by total weights, then multiply by years’ purchase.