Three friends — X, Y, and Z — decided to start a cafe business together. They agreed that X would invest ₹7,000 for 8 months, Y would invest ₹9,000 for 6 months, and Z would invest ₹12,000 for 4 months. X, being the manager, would receive 5% of the profits as compensation for his work. The business earned a total profit of ₹9,000.
Consider the following statements:
Statement I: Y’s share in the profit is ₹2,800.
Statement II: X’s managerial compensation is ₹450.

Select the correct answer from the options below:
(a) Only Statement I is correct.
(b) Only Statement II is correct.
(c) Both Statements I and II are correct.
(d) None of the Statements is correct.

Question

Three friends &mdash; X, Y, and Z &mdash; decided to start a cafe business together. They agreed that X would invest ₹7,000 for 8 months, Y would invest ₹9,000 for 6 months, and Z would invest ₹12,000 for 4 months. X, being the manager, would receive 5% of the profits as compensation for his work. The business earned a total profit of ₹9,000.
Consider the following statements:
Statement I: Y&rsquo;s share in the profit is ₹2,800.
Statement II: X&rsquo;s managerial compensation is ₹450.

Select the correct answer from the options below:
(a) Only Statement I is correct.
(b) Only Statement II is correct.
(c) Both Statements I and II are correct.
(d) None of the Statements is correct.

ONLiNE UPSC · Accepted Answer

Total profit = ₹9,000
Managerial compensation to X = 5% of ₹9,000 = ₹450
Remaining profit = ₹9,000 &minus; ₹450 = ₹8,550
Now, calculate profit-sharing ratio based on investment &times; time:
X: ₹7,000 &times; 8 = 56,000
Y: ₹9,000 &times; 6 = 54,000
Z: ₹12,000 &times; 4 = 48,000
Ratio: X:Y:Z = 56,000 : 54,000 : 48,000 = 56:54:48
Simplify by dividing by 2: 28:27:24
Total parts = 28 + 27 + 24 = 79
Y&rsquo;s share = (27 / 79) &times; ₹8,550 = ₹2,922 (approx).
Statement I is incorrect.
Statement II is correct (X receives ₹450 as manager).

Hence, option b is correct.

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E Question 1	⏱ 0
Three friends — X, Y, and Z — decided to start a cafe business together. They agreed that X would invest ₹7,000 for 8 months, Y would invest ₹9,000 for 6 months, and Z would invest ₹12,000 for 4 months. X, being the manager, would receive 5% of the profits as compensation for his work. The business earned a total profit of ₹9,000. Consider the following statements: Statement I: Y’s share in the profit is ₹2,800. Statement II: X’s managerial compensation is ₹450. Select the correct answer from the options below: (a) Only Statement I is correct. (b) Only Statement II is correct. (c) Both Statements I and II are correct. (d) None of the Statements is correct.