Multiple choice

A, B & C share profits and losses in the ratio of $1:1:1$. B retired from business and his share is purchased by A & C in $40:60$ ratio. New profit sharing ratio between A & C would be ________.

  1. $1:1$
  2. $2:3$
  3. $7:8$
  4. $3:5$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

B's share is 1/3. A and C buy it in ratio 40:60 (2:3). A gets (2/5)(1/3) = 2/15. C gets (3/5)(1/3) = 3/15. New A = 1/3 + 2/15 = 7/15. New C = 1/3 + 3/15 = 8/15. Ratio = 7:8.

AI explanation

A's new share is 1/3 plus 2/5, which equals 7/15. C's new share is 1/3 plus 3/5, which equals 8/15. The new profit sharing ratio between A and C is 7:8.

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