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Jhon, Mona and Gordon, three US based business partners, jointly invested in a business project to supply nuclear fuel to India. As per their share in the investment, Gordon will receive 2/3 of the profits whereas Jhon and Mona divided the remainder equally. It is estimated that the income of Jhon will increase by $ 60 million when the rate of profit rises from 4% to 7%. What is Mona's capital ?
  • a)
    $ 2000 million
  • b)
    $ 3000 million   
  • c)
    $ 5000 million
  • d)
    $ 8000 million
Correct answer is option 'A'. Can you explain this answer?
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To solve this question, let's break it down into smaller steps:

Step 1: Determine the total profit and the profit distribution among the partners.
- Gordon receives 2/3 of the profits.
- Jhon and Mona divide the remainder equally.

Step 2: Calculate Jhon's income increase.
- Jhon's income increases by $60 million when the profit rate rises from 4% to 7%.

Step 3: Use Jhon's income increase to calculate the total profit.
- Since Jhon's income increase is directly proportional to the total profit increase, we can calculate the total profit using the following formula:
Total Profit Increase / Income Increase = Total Profit / Jhon's Income
$60 million / 0.03 (7% - 4%) = Total Profit / Jhon's Income

Step 4: Calculate Jhon's income.
- Jhon's income is the sum of his initial income and the increase:
Jhon's Income = Initial Income + Income Increase

Step 5: Calculate the profit distribution among Jhon and Mona.
- Since Jhon and Mona divide the remainder equally, each partner's income is half of the remainder.

Step 6: Calculate Gordon's income.
- Gordon's income is 2/3 of the total profit.

Step 7: Calculate Mona's income.
- Mona's income is half of the remainder.

Step 8: Calculate Mona's capital.
- Mona's capital is equal to Mona's income divided by the profit rate:
Mona's Capital = Mona's Income / Profit Rate

Now, let's calculate the solution:

Step 1: Determine the total profit and the profit distribution among the partners.
- Gordon receives 2/3 of the profits.
- Jhon and Mona divide the remainder equally.

Step 2: Calculate Jhon's income increase.
- Jhon's income increases by $60 million when the profit rate rises from 4% to 7%.
Income Increase = $60 million

Step 3: Use Jhon's income increase to calculate the total profit.
- Since Jhon's income increase is directly proportional to the total profit increase, we can calculate the total profit using the following formula:
Total Profit Increase / Income Increase = Total Profit / Jhon's Income
$60 million / 0.03 (7% - 4%) = Total Profit / Jhon's Income
Total Profit = ($60 million / 0.03) * Jhon's Income

Step 4: Calculate Jhon's income.
- Jhon's income is the sum of his initial income and the increase:
Initial Income = Jhon's Income - Income Increase
Jhon's Income = (Initial Income + Income Increase)

Step 5: Calculate the profit distribution among Jhon and Mona.
- Since Jhon and Mona divide the remainder equally, each partner's income is half of the remainder.

Step 6: Calculate Gordon's income.
- Gordon's income is 2/3 of the total profit.

Step 7: Calculate Mona's income.
- Mona's income is half of the remainder.

Step 8: Calculate Mona's capital.
- Mona's capital is equal to Mona's income divided by the profit rate:
Mona's Capital = Mona's Income / Profit Rate

Based on the given information, the correct answer is option A) $2000 million.
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Jhon, Mona and Gordon, three US based business partners, jointly invested in a business project to supply nuclear fuel to India. As per their share in the investment, Gordon will receive 2/3 of the profits whereas Jhon and Mona divided the remainder equally. It is estimated that the income of Jhon will increase by $ 60 million when the rate of profit rises from 4% to 7%. What is Mona's capital ?a)$ 2000 millionb)$ 3000 millionc)$ 5000 milliond)$ 8000 millionCorrect answer is option 'A'. Can you explain this answer?
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