Question 66

Two businessmen A and B invest in a business in the ratio 5 : 8. They decided to reinvest 30% of the profit they earned back into the business. The remaining profit they distributed amongst themselves. If A's share of the profit was Rs 87,500 then how much profit (in Rs) did the business make?

Solution

Since Ratio of investment = 5 : 8,

⇒ Ratio of profit distribution will also be = 5 : 8

Let us take the total profit = P

Since they decided to reinvest the 30% profit so remaining profit that is been distributed = 0.7P

⇒ A's share in the profit = 5/13 × 0.7P

⇒ 7P/26 = 87500

∴ P = Rs. 325000

D is correct choice.

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