Question Details

Three partners, Dev, Esha, and Farhan, launch a boutique cafe by contributing initial capital of $15,000, $25,000, and $40,000 respectively. If their business yields a total net profit of $96,000 at the end of the first year, how much profit will Esha receive based on their investment ratio?

Options

A

$18,000

B

$48,000

C

$32,000

D

$30,000

Show Answer

Correct Answer :

Option D

$30,000

Rs. 18,000

Solution :

The correct option is $30,000.

Step-by-step explanation:

Step 1: Determine the investment ratio of the partners.
Dev, Esha, and Farhan contributed initial capital of $15,000, $25,000, and $40,000 respectively.
The ratio of their investments is:

Ratio = 15000 : 25000 : 40000

Dividing each value by 5,000 simplifies the ratio to its lowest terms:

Dev : Esha : Farhan = 3 : 5 : 8

Step 2: Calculate total ratio parts.
Sum the individual ratio components to get the total parts:

Total Parts = 3 + 5 + 8 = 16

Step 3: Calculate Esha's share of the net profit.
The total net profit at the end of the year is $96,000.
Esha's share corresponds to 5 out of 16 total parts of the profit:

Esha's Profit = 5 16 × $ 96000

Dividing $96,000 by 16 gives the value of one part:

96000 16 = 6000

Multiplying by Esha's 5 parts:

Esha's Profit = 5 × $ 6000 = $ 30000

Therefore, Esha will receive $30,000 based on their investment ratio.

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