Company ABC starts an educational program in collaboration with Institute XYZ. As per the
agreement, ABC and XYZ will share profit in 60:40 ratio. The initial investment of ₹100,000 on
infrastructure is borne entirely by ABC whereas the running cost of ₹400 per student is borne by XYZ. If
eac…

Question

Company ABC starts an educational program in collaboration with Institute XYZ. As per the 
agreement, ABC and XYZ will share profit in 60:40 ratio. The initial investment of ₹100,000 on 
infrastructure is borne entirely by ABC whereas the running cost of ₹400 per student is borne by XYZ. If 
each student pays ₹2000 for the program find the minimum number of students required to make the 
program profitable, assuming ABC wants to recover its investment in the very first year and the program 
has no seat limits.

Keshav A V · Answer

Hi ravi,
With every incoming student, they make a profit of 2000
This profit is distributed in the ratio of 60:40
Hence, company ABC earns 1200 with every new student
To recuperate the initial investment of 1,00,000
They will need atleast 84 students in the first year (100000/1200=83.33)
Hope this helps:)

SD HAWK · Answer

Sir, this is a XAT 2016 question. We followed the same logic and marked 84 while attempting the question but the answer given is 63. Kindly correct the solution in the previous year paper if it's incorrect.

Ravi Parmar · Answer

thanks keshav

Sounak Roy · Answer

167 ?

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