Mr.Shivkumar started a business investing Rs.25,000 in 1996. In 1997 he invested an additional amount of Rs.10,000 and Mr.Rakesh joined him with an amount of Rs.35,000 in 1998. Mr.Shivkumar invested another additional amount of Rs.10,000 and Mr.Suresh joined them with an amount of Rs.35,000. What will be Rakesh's share in the profit of Rs.1,50,000 earned at the end of three years from the start of the business in 1996?
Mr.Shivkumar started a business investing Rs.25,000 in 1996. In 1997 he invested an additional amount of Rs.10,000 and Mr.Rakesh joined him with an amount of Rs.35,000 in 1998. Mr.Shivkumar invested another additional amount of Rs.10,000 and Mr.Suresh joined them with an amount of Rs.35,000. What will be Rakesh's share in the profit of Rs.1,50,000 earned at the end of three years from the start of the business in 1996?
ARs.70,000
BRs.50,000
CRs.45,000
D Rs.75,000
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Correct answer: Rs.50,000
Explanation:
Shivkumar's equivalent capital
= (25000 x 3) + (10000 x 2) + (10000 x 1) = 105000
Rakesh's equivalent capital = 35000 x 2 = 70000
Suresh's equivalent capital = 35000 x 1 = 35000
Total profit of Rs.150000 will be distributed in the ratio of their equivalent capitals.
Shivkumar : Rakesh : Suresh = 105 : 70 : 35
= 3 : 2 : 1
Rakesh's share in the total profit = 2/(3 + 2 + 1) x 150000
= Rs.50000
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