profit expected to next 3 years is 50000/ an discounting/present value factor/inflation rate 10% value of good will @ 2 yrs purchase
pls explian with the help (1/1+r)^n this formula nd explain how to calculate (1/1+r)^n in ordinary calculator.........
now the rate is 10%
year1: 1/1.10 then press M+
year2: just press = then again M+
year3:just press = then again M+
at last MRC this gives the PVAF for 3years @ 10%
since 50000 is an annuity u can directly multiply it with the PVAF do get the present value or discounted value.
hope it will be helpful to u
thank you very much.........
Jawahar and Associates Chartered Accountants
Hyderabad
CA Inter
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BHUPINDER SHAH AND COMPANY
New Delhi
CA Inter
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