Question

A man invested rs 2000 in 10% shares at rs 125 of company A and rs 2400 in 15% shares at rs 120 of company B. Which investment is more profitable (face value =rs 10 )​

Answer 1

Answer:

SAME PROCESS BUT DIFFERNT NUMBERS I CANT HIVE DIRECTLY I AM SORRY

Explanation:

Face value of 1 share =Rs. 100

Market value of 1 share =Rs. (100+10010×100)

=Rs. (100+10)

=Rs. 110

Investment =Rs. 8,800

Annual dividend =Rs. 1200

(i) Total number of shares =1108800=80 shares

(ii) Dividend percentage per share =80×1001200×100

=15%.

Answer 2

Company B's investment is more profitable than Company A, given the rate of dividends, investment, and market value of each share.

Given :

Investment 1 : Rs. 2000 in 10% shares in Company A

Investment 2 : Rs. 2400 in 15% shares in Company B

Face Value of each share = Rs. 100 ( Corrected )

To Find :

The profitable investment among companies A and B

Solution :

We have the Rate of Dividend (r), market value(mv), face value(fv), and the investment amount(A) made for each company. Using this we can calculate the :

        The number of shares : $n = A / mv$

        Dividend Earning : $P = n * r * fv\\\\P = (A/mv) * r * fv$

Calculating Earnings in company A investment :

$A_{A} = Rs. 2000\\ r_{A} = 10%\\\\ mv_{A} = Rs. 125\\ fv_{A} = Rs. 100$

The profit in company A investment then is :

                         $p_{A} = (A_{A} *r_{A}*fv_{A} )/mv_{A}$

                               $=(2000 * (10/100) * 100)/125$

                               $= 20000 / 125$

                               $= 160$

Thus, investment A will have a profit of Rs. 160.

Calculating Earnings in company B investment :

$A_{B} = Rs. 2400\\ r_{B} = 15%\\\\mv_{B} = Rs. 120\\ fv_{B} = Rs. 100$

The profit in company B investment then is :

                         $p_{B} = (A_{B} *r_{B}*fv_{B} )/mv_{B}$

                               $=(2400 * (15/100) * 100)/120$

                               $= 2400*15 / 120$

                               $=300$

Thus, investment B will have a profit of Rs. 300.

So, Rs 300 (Profit in B) > Rs 160 (Profit in A )

Hence, investment in company B is more profitable.

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