Response to the following problem:
Mr. Wiseman has invested a sum of Rs. 2,00,000 in his own business which is a very profitable one. The annual profit earned from his business is Rs. 45000 which includes a sum of Rs 10,000 received as compensation of a part of his business premises. As an alternative to his engagement in his business, he could have invested the money in long term deposit with Bank earning a normal rate of interest of 10% and also could engage himself in employment thereby getting an annual salary of Rs 7200.
Considering 2% as fair compensation for the risk involved in the business, calculate the value of goodwill of his business on capitalization of super profits at the normal rate of interest. Ignore taxation.