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A, B and C invest $ 1000, $ 4000 and $ 5000 respectively in a business. At the end of the year the balance sheet shows a loss of 20% of the total initial investment. Find the share of loss of B.
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- $ 1000
- $ 200
- $ 800
- $ 1200
Correct Option: C
As per the given question ,
Total initial investment = $ 1000 + $ 4000 + $ 5000 = $ 10,000
Total loss = 20% of total initial investment
| Total loss = | × 10,000 = $ 2000 | 100 |
(This is an example of simple partnership.)
∴ $ 2000 has to be divided among the partners in proportion to their investments.
Ratio of investments are A : B : C = $ 1000 : $ 4000 : $ 5000 = 1 : 4 : 5
Sum of the ratios = 1 + 4 + 5 = 10
| 1 ⇒ | = $ 200 | 10 |
Share of loss for B = 4 × $ 200 = $ 800
