Three friends, A, B, and C, invest money in the ratio 2:3:5. After 6 months later, A invests another amount equaling $35,000, while C withdraws $15,000. The ratio of investments then changes to 11:6:7. What is the ratio of profit sharing at the end of the year if profit sharing is determined by the amount of money invested weighted by the time spent in the investment?
The ratio of profit sharing at the end of the year is 15:12:17.
To determine the profit-sharing ratio among friends A, B, and C, we must consider both their initial investments and any subsequent changes in their contributions over time. By weighing the investments by the duration for which they were held, we can accurately assess their shares of the total profit.
This choice inaccurately reflects the proportional contributions of A, B, and C after accounting for their investments over the time period. The ratios do not correspond to the adjusted investments made after 6 months, leading to a miscalculation of the resulting profit-sharing ratio.
While this ratio seems to offer a distribution based on some investment values, it fails to adequately consider the revised contributions after A's additional investment and C's withdrawal. The calculation does not align with the final ratios established post-adjustment, resulting in an incorrect profit-sharing assessment.
This option also presents an incorrect distribution of profits among the three friends. The numbers do not accurately represent the adjusted investments and time contributions post the additional investment and withdrawal, leading to an inaccurate reflection of actual profit shares.
This choice accurately represents the profit-sharing ratio after taking into account the initial investments, the additional investment by A, the withdrawal by C, and the time each investment was held. The calculation correctly reflects the adjusted contributions and the time-weighted investments, resulting in an appropriate distribution of profits.
This option suggests a profit-sharing ratio that does not correspond to any logical distribution based on the investments made by A, B, and C. The values are not derived from the actual calculations needed to determine the final profit-sharing ratio given the changes in investments, thus making it an incorrect choice.
The calculated profit-sharing ratio of 15:12:17 reflects the correct distribution of profits among A, B, and C, factoring in their respective investments and the duration of those investments. This thorough approach ensures that each friend's share of the profits corresponds accurately to their financial contributions over the investment period, accommodating changes in investments and withdrawals.
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