A, B and C enter into a partnership. They invest Rs. 40,000, Rs. 80,000 and Rs. 1,20,000 respectively. At the end of the first year, B withdraws Rs. 40,000, while at the end of the second year, C withdraws Rs. 80,000. IN what ratio will the profit be shared at the end of 3 years?
Correct answer: B. 3:4:7
- A. 2:3:5
- B. 3:4:7
- C. 4:5:9
- D. None of these
Explanation
Using capital-time products, A contributes Rs. 40,000 x 36 months = 1,440,000 Rs.-months, B contributes Rs. 80,000 x 12 months + Rs. 40,000 x 24 months = 1,920,000 Rs.-months, and C contributes Rs. 120,000 x 24 months + Rs. 40,000 x 12 months = 3,360,000 Rs.-months. Their ratio is 1,440,000 : 1,920,000 : 3,360,000 = 3 : 4 : 7. A student may choose 2:3:5 by making an arithmetic error while adding B's two periods.
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