Quantitative Techniques
Passage 1: Business Partnership and Profit Sharing
Three friends, Arjun, Bhavana, and Chetan, started a business venture on January 1, 2024. Arjun invested ₹4,00,000, Bhavana invested ₹6,00,000, and Chetan invested ₹5,00,000. After 4 months, Arjun withdrew 25% of his investment to fund another project. Two months later, Bhavana increased her investment by 50% of her original amount. Chetan maintained his investment throughout the year.
At the end of the year, the business made a total profit of ₹8,40,000. Before distributing the profit, the partners agreed to set aside 15% of the profit as a reserve fund for future expansion. Additionally, they decided that 10% of the remaining profit would be distributed equally among all three partners as a management bonus, and only the balance would be distributed in proportion to their effective capital contributions (investment × time).
During the year, the business also incurred operational expenses that were shared in the ratio 2:3:2 among Arjun, Bhavana, and Chetan respectively. The total expenses amounted to ₹1,20,000, which were deducted from each partner’s share after profit distribution.
Q1. What is the ratio of effective capital contributions (investment × time in months) of Arjun, Bhavana, and Chetan for the year 2024?
A. 4:9:6 B. 3:7:5 C. 5:8:6 D. 4:8:5
Q2. After setting aside the reserve fund and management bonus, what amount (in ₹) is available for……….
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