A and B start a business with Rs.6000 and Rs.8000 respectively. Hoe should they share their profits at the end of one year?
- 2:5
- 3:7
- 3:4
- 1:2
Explanation
A and B have invested Rs. 6000 and Rs. 8000 respectively, which means their capital ratio is:
A : B = 6000 : 8000 = 3 : 4
Since they are sharing the profits at the end of the year, it is assumed that they are sharing the profits in the ratio of their investments.
Therefore, the profit-sharing ratio should also be 3:4.
So, if the total profit is x, A should get 3x/7 and B should get 4x/7.
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