X, Y and Z have been sharing profits in the ratio of 4 : 2 : 1. Z retires. X and Y take Z's share equally. What will be the new profit sharing ratio among existing partners?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- 9:5.
Old ratio = 4:2:1 (X,Y & Z)
Share of Z = 1/7
Gain of X =1/2*1/7
=1/14
Gain of Y = 1/2*1/7
=1/14
New share = Old share + gained share
New Share of X = 4/7+1/14
= (8+1)/14
= 9/14
New Share of Y = 2/7+1/14
= (4+1)/14
= 5/14
New ratio between X & Y = 9/14 :5/14
= 9:5