X and Y are partners in a firm sharing profits in the ratio 4:5. X surrenders 1/4 of his share and Y…
Originally, X's share is 4/9 and Y's share is 5/9. X surrenders 1/4 of his share = (1/4) × (4/9) = 1/9, leaving X with 4/9 - 1/9 = 3/9. Y surrenders 1/5 of his share = (1/5)…
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X and Y are partners in a firm sharing profits in the ratio 4:5. X surrenders 1/4 of his share and Y surrenders 1/5 of his share in favour of Z, the new partner. What will be the new profit-sharing ratio of the firm's partners?
Answer and explanation
Correct answer A
Originally, X's share is 4/9 and Y's share is 5/9. X surrenders 1/4 of his share = (1/4) × (4/9) = 1/9, leaving X with 4/9 - 1/9 = 3/9. Y surrenders 1/5 of his share = (1/5) × (5/9) = 1/9, leaving Y with 5/9 - 1/9 = 4/9. Z's share is the sum of sacrifices = 1/9 + 1/9 = 2/9. Therefore, the new profit-sharing ratio of X, Y, and Z is 3/9 : 4/9 : 2/9, or 3 : 4 : 2.
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UGC NET Commerce