Multiple choice

A and B invest in a business with an initial investment of Rs. 25 lakh each. C joins them after 6 months with an investment of Rs. 50 lakh. At the end of the year, the business earns them a profit of Rs. 24 lakh. What will be the share of C in the profit?

  1. Rs. 4 lakh

  2. Rs. 6 lakh

  3. Rs. 8 lakh

  4. Rs. 10 lakh

  5. Rs. 12 lakh
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Investment ratio: A=25*12, B=25*12, C=50*6. Ratio = 300:300:300 = 1:1:1. Profit share for C is 1/3 of 24 lakh = 8 lakh.

AI explanation

By the equivalent capital method, the profit sharing ratio is the product of investment and time. A and B each invested Rs. 25 lakh for 12 months, giving equivalent capitals of 300 each. C invested Rs. 50 lakh for 6 months, giving an equivalent capital of 300. The profit sharing ratio for A, B and C is 300 : 300 : 300, or 1 : 1 : 1. The total profit of Rs. 24 lakh is divided equally three ways, so C receives Rs. 8 lakh.

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