rajesh (icsi) (26 Points)
12 November 20141. Why Avg profit method is also called year purchase method?
2. In avg profit method why Avg profit is multiply to given data to find goodwill. Eg. Avg profit x 3 Times/4 times.
3. In weighted avg profit method Why profit is multiply with given weights.
4. difference between avg profit method and weighted avg method.
Rama chary Rachakonda
(Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)
(5175 Points)
Replied 20 December 2014
Weighted average method:-when you have a group of items that each has a frequency associated with it. In these types of situations, using a weighted average can be much quicker and easier than the traditional method of adding up each individual value and dividing by the total. This is especially useful when you are dealing with large data sets that may contain hundreds or even thousands of items but only a finite number of choices.
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