A, b and c form a company. A invests half of c expecting a return of 10%. B invests three-fourths of c, expecting a return of 15% on it. C invests ` 3000 and the profit of the firm is 25%. How much would bs share of profit be more than that of as share if b gets an additional 8% for managing the business? (assume that their expectations with respect to returns on capital invested are met before profit is divided in the ratio of capitals invested).
Answers
A, b and c form a company. A invests half of c expecting a return of 10%. B invests three-fourths of c, expecting a return of 15% on it. C invests ` 3000 and the profit of the firm is 25%. How much would bs share of profit be more than that of as share if b gets an additional 8% for managing the business? (assume that their expectations with respect to returns on capital invested are met before profit is divided in the ratio of capitals invested).
Explanation:
C Invests = 3000
A Invests= 1500 ( Half of C's investment)
B Invests = 2250 ( Three fourth of C's investment)
Return on Investment
A R.O.I = Investment + 10% = 1500 + 150 = 1650
B R.O.I = Investment + 15 % + 8% = 2250 + 337.5 + 180 = 2767.5
The Total Investment = 6750
Profit =25 % = 1687.5
B's Share of Profit = 517.5
A's Share of Profit = 150
The Difference = 367.5