Question

Factor(s) that affect(s) goodwill is/are:

• A. Favourable location
• B. Capital required
• C. Efficiency of management
• D. All of these

Hint:

Goodwill is influenced by location, capital efficiency, managerial skills, and overall reputation — making it a composite factor.

Answer 1

The Correct Option is D

Step 1: Concept of goodwill.
Goodwill reflects the reputation and earning power of a business. It depends on various internal and external factors that enhance customer loyalty and profitability.
Step 2: Analysis of given factors.
- Favourable location: A business at a prime location attracts more customers, increasing goodwill.
- Capital required: Businesses requiring less capital but earning high profits generally show higher goodwill.
- Efficiency of management: Skilled management improves productivity, customer satisfaction, and profit, thereby increasing goodwill.
Step 3: Conclude.
Since all the listed factors directly impact goodwill, the correct answer is “All of these”.
Final Answer: \[ \boxed{\text{All of these}} \]