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A and B invest in a business with an initial investment of Rs. 25 lakh each. C joins them after 6 months with an investment of Rs. 50 lakh. At the end of the year, the business earns them a profit of Rs. 24 lakh.
If they reinvest the profit in the business, what will be the new ratio of their shares in the business?
  • a)
    32 : 32 : 59
  • b)
    33 : 33 : 58
  • c)
    34 : 34 : 57
  • d)
    35 : 35 : 54
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
A and B invest in a business with an initial investment of Rs. 25 lak...
Solution:

Given:
Initial investment of A and B = Rs. 25 lakh each
Investment of C after 6 months = Rs. 50 lakh
Profit earned by the business in 1 year = Rs. 24 lakh

To find:
The new ratio of their shares in the business after reinvesting the profit.

Calculation:
Let's calculate the total investment made by each partner:

- A's investment for 12 months = Rs. 25 lakh
- B's investment for 12 months = Rs. 25 lakh
- C's investment for 6 months = Rs. 50 lakh

Total investment made by A = 25 lakh * 12 = Rs. 3 crore
Total investment made by B = 25 lakh * 12 = Rs. 3 crore
Total investment made by C = 50 lakh * 6 = Rs. 3 crore

Now, let's calculate the ratio of their shares in the business:

The ratio of A's share = 3 crore : 3 crore : 3 crore = 1 : 1 : 1
The ratio of B's share = 3 crore : 3 crore : 3 crore = 1 : 1 : 1
The ratio of C's share = 3 crore : 3 crore : 3 crore = 1 : 1 : 1

Since the profit of Rs. 24 lakh is reinvested in the business, the total investment made by each partner remains the same.

Therefore, the new ratio of their shares in the business after reinvesting the profit will be:

A : B : C = 1 : 1 : 1

Hence, option B) 33 : 33 : 58 is the correct answer.
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Community Answer
A and B invest in a business with an initial investment of Rs. 25 lak...
Let the profit per Rs. 25 lakh invested for a month be Rs. p.
So, total profit at the end of the business year = 2 × 12 p + 2 × 6 p = 24 lakh
Or, 36p = 24
Or p = (⅔)lakh
Thus, C's share in the profit = Rs. 2 × 6p = Rs. 12 × (⅔)lakh = Rs. 8 lakh
A's share = B's share = Rs. 12 × (⅔)lakh = Rs. 8 lakh
Thus, A's share in business = B's share = Rs. (25 + 8) lakh = Rs. 33 lakh
C's share in business = Rs. (50 + 8) lakh = Rs. 58 lakh
Thus, the required ratio is 33 : 33 : 58.
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Direction: Read the following information and answer the question given below.- Ambani, Premji, Hinduja and Mittal started a business by investing initially in the ratio 5: 9: 7: 6 and after 1st year Premji withdrew 33(1/3) % of his initial investment.- After 1st year Hinduja, Ambani and Mittal invested additional amounts in the ratio 7:12:15.- Additional investments of Ambani after 1st year was 75% of his additional investment after 2nd year and the additional investment of Premji after 2nd year was equal to his initial investment and after 2nd year Hinduja and Mittal withdrew some parts of their investment in the ratio 4:5.- After 3rd year the ratio of additional investments of Ambani and Premji was 3:2 and Hinduja and Mittal withdrew parts of their investments in the ratio 1:2 respectively and they continued business at any point of time they shared profit in the ratio of investment considering time of investment.If the average initial investment of all the four persons is Rs.6750 and the additional investment of Ambani after 1st year was 20% more than his initial investment, then in what ratio will Ambani, Premji, Hinduja and Mittal will share the profit at the end of 2nd year?

Direction: Read the following information and answer the question given below.- Ambani, Premji, Hinduja and Mittal started a business by investing initially in the ratio 5: 9: 7: 6 and after 1st year Premji withdrew 33(1/3) % of his initial investment.- After 1st year Hinduja, Ambani and Mittal invested additional amounts in the ratio 7:12:15.- Additional investments of Ambani after 1st year was 75% of his additional investment after 2nd year and the additional investment of Premji after 2nd year was equal to his initial investment and after 2nd year Hinduja and Mittal withdrew some parts of their investment in the ratio 4:5.- After 3rd year the ratio of additional investments of Ambani and Premji was 3:2 and Hinduja and Mittal withdrew parts of their investments in the ratio 1:2 respectively and they continued business at any point of time they shared profit in the ratio of investment considering time of investment.If the initial investment of Premji was Rs.9000 and the additional investment of Mittal at the end of 1st year was 25% more than his initial investment and the ratio of additional investment by Hinduja at the end of 1st year to the amount withdrawn by Mittal at the end of 2nd year was 7:5, then what was the total profit at the end of 3rd year, if profit of Ambani at the end of 3rd year was Rs.21000?

Direction: Read the following information and answer the question given below.- Ambani, Premji, Hinduja and Mittal started a business by investing initially in the ratio 5: 9: 7: 6 and after 1st year Premji withdrew 33(1/3) % of his initial investment.- After 1st year Hinduja, Ambani and Mittal invested additional amounts in the ratio 7:12:15.- Additional investments of Ambani after 1st year was 75% of his additional investment after 2nd year and the additional investment of Premji after 2nd year was equal to his initial investment and after 2nd year Hinduja and Mittal withdrew some parts of their investment in the ratio 4:5.- After 3rd year the ratio of additional investments of Ambani and Premji was 3:2 and Hinduja and Mittal withdrew parts of their investments in the ratio 1:2 respectively and they continued business at any point of time they shared profit in the ratio of investment considering time of investment.If the initial investment of Premji was Rs.2000 more than the initial investment of Hinduja and additional investment of Hinduja after 1st year was the half of his initial investment, then what is the share of Ambani in the total profit of Rs.5440 at the end of two years?

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A and B invest in a business with an initial investment of Rs. 25 lakh each. C joins them after 6 months with an investment of Rs. 50 lakh. At the end of the year, the business earns them a profit of Rs. 24 lakh.If they reinvest the profit in the business, what will be the new ratio of their shares in the business?a)32 : 32 : 59b)33 : 33 : 58c)34 : 34 : 57d)35 : 35 : 54Correct answer is option 'B'. Can you explain this answer?
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A and B invest in a business with an initial investment of Rs. 25 lakh each. C joins them after 6 months with an investment of Rs. 50 lakh. At the end of the year, the business earns them a profit of Rs. 24 lakh.If they reinvest the profit in the business, what will be the new ratio of their shares in the business?a)32 : 32 : 59b)33 : 33 : 58c)34 : 34 : 57d)35 : 35 : 54Correct answer is option 'B'. Can you explain this answer? for CAT 2024 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about A and B invest in a business with an initial investment of Rs. 25 lakh each. C joins them after 6 months with an investment of Rs. 50 lakh. At the end of the year, the business earns them a profit of Rs. 24 lakh.If they reinvest the profit in the business, what will be the new ratio of their shares in the business?a)32 : 32 : 59b)33 : 33 : 58c)34 : 34 : 57d)35 : 35 : 54Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B invest in a business with an initial investment of Rs. 25 lakh each. C joins them after 6 months with an investment of Rs. 50 lakh. At the end of the year, the business earns them a profit of Rs. 24 lakh.If they reinvest the profit in the business, what will be the new ratio of their shares in the business?a)32 : 32 : 59b)33 : 33 : 58c)34 : 34 : 57d)35 : 35 : 54Correct answer is option 'B'. Can you explain this answer?.
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