Question

Maria Martinez and her sister, Christina, are planning to operate a small day care center together. Maria originally invested $24,000 in the business, and Christina invested $8,000. Maria and Christina decide to divide all of the profits and share all of the losses using a fixed ratio. If the ratio agreed upon is in proportion to their original investment, what would be Christina's share of a $60,000 end-of-year profit? (Hint: The original total investment was $32,000, which includes $8,000 from Christina and $24,000 from Maria. Christina's $8,000 is one-fourth, or 25 percent, of the total.) A. $10,000 B. $30,000 C. $25,000 D. $15,000

Answer 1

Option D: $15,000.

Christina's share of the end year profit is the same proportion of her investement.

She invested $ 8,000 of a total of $ 32,000, that is 8000/32000 = 0.25.

Then the share of the $60,000 end-of-the profit would be 0.25 * $ 60,000 = $ 15,000.