Question

Four individuals pool money together to start a new business and agree to split the profits equally. N invests $6,000, X invests $2,000, Y invests $8,000 and Z invests $4,000. If the profits for the first month were $100,000, Y receives __?__ less than if the profits were divided in proportion to how much they invested.

A) $40,000
B) $25,000
C) $15,000
D) $8,000
E) $2,000

Answer 1

To find the amount that Y receives less if the profits were divided in proportion to how much they invested, we need to calculate the proportion of Y's investment to the total investment. Y's proportion of the investment is $8,000 / $20,000 = 0.4. So, if the profits were divided proportionally, Y would receive 0.4 * $100,000 = $40,000.

Step-by-step explanation:

To find the amount that Y receives less if the profits were divided in proportion to how much they invested, we need to calculate the proportion of Y's investment to the total investment. The total investment is $6,000 + $2,000 + $8,000 + $4,000 = $20,000. Y's proportion of the investment is $8,000 / $20,000 = 0.4. So, if the profits were divided proportionally, Y would receive 0.4 * $100,000 = $40,000.

Since Y receives less in the equal profit distribution compared to the proportional distribution, the answer is A) $40,000.