If A invests $20,000 and B invests $30,000 in a business, and they agree to shar

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Question: If A invests $20,000 and B invests $30,000 in a business, and they agree to share profits in the ratio of their investments, what will be B\'s share if the total profit is $50,000?

Options:

$20,000
$30,000
$25,000
$15,000

Correct Answer: $25,000

Solution:

B\'s share = (B\'s investment / Total investment) * Total profit = (30000 / 50000) * 50000 = $30,000.

If A invests $20,000 and B invests $30,000 in a business, and they agree to shar

Practice Questions

If A invests $20,000 and B invests $30,000 in a business, and they agree to share profits in the ratio of their investments, what will be B's share if the total profit is $50,000?

$20,000
$30,000
$25,000
$15,000

Questions & Step-by-Step Solutions

If A invests $20,000 and B invests $30,000 in a business, and they agree to share profits in the ratio of their investments, what will be B's share if the total profit is $50,000?

Step 1: Identify the amount A invested, which is $20,000.
Step 2: Identify the amount B invested, which is $30,000.
Step 3: Calculate the total investment by adding A's and B's investments: $20,000 + $30,000 = $50,000.
Step 4: Determine the ratio of B's investment to the total investment: B's investment ($30,000) divided by total investment ($50,000).
Step 5: Calculate the ratio: 30000 / 50000 = 0.6.
Step 6: Identify the total profit, which is $50,000.
Step 7: Calculate B's share of the profit by multiplying the ratio (0.6) by the total profit ($50,000): 0.6 * 50000 = $30,000.

Profit Sharing Ratio – Understanding how to calculate profit shares based on investment ratios.
Proportional Distribution – Applying the concept of proportional distribution of profits based on the amount invested.

If A invests $20,000 and B invests $30,000 in a business, and they agree to shar

What’s inside this PDF?

If A invests $20,000 and B invests $30,000 in a business, and they agree to shar

Practice Questions

Questions & Step-by-Step Solutions

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