(a) Determine the total amount of assets used in the business, other than good will, patents, trademarks, copyrights, and the like.

(b) Determine the liabilities of the business and deduct the amount thereof from the sum determined pursuant to subdivision (a).

(c) Determine what percentage of the difference determined pursuant to subdivision (b) represents a fair return thereon (in the absence of evidence to the contrary, 15 percent thereof will ordinarily be considered a proper percentage of return), and then multiply the amount of such difference by the percentage determined. The product will represent the amount of a fair return.

(d) Determine the average net profit of the business for a reasonable period immediately prior to the date of the transferor's death. Five years will ordinarily represent a “reasonable period.”

(e) Deduct the amount of the fair return determined pursuant to subdivision (c) from the average net profit.

(f) Determine the “number of years purchase period.” By this is meant the number of years after a sale of the business for which a buyer, as part of the purchase price, would pay the seller the average net profit of the business. Unless the nature and character of the business in any particular case require a different figure, the number of years purchase period will be considered to be five years.

(g) Multiply the difference between the amount of fair return and the average net profit, as determined pursuant to subdivision (5), by the number of years purchase period. The product will constitute the amount of good will.