Profit To Partner

Step 1: Concept of superprofit.
Superprofit represents the “extra” profit earned by a firm over and above the normal expected profit. It shows the competitive advantage of a business.
Step 2: Formula for superprofit.
Here, - Average profit = Average of actual past profits.
- Normal profit = Capital employed Normal Rate of Return (NRR).
Step 3: Eliminate incorrect options.
- Option (A) Total profit No. of years This gives average profit, not superprofit.
- Option (C) Weighted profit No. of years This is related to goodwill valuation, not superprofit.
- Option (D) None of these Incorrect because option (B) is correct.
Step 4: Conclude.
Thus, superprofit is simply the difference between average profit and normal profit.
Final Answer: