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If the profit earned in 2006 by Company B was Rs.8, 12,500, what was the total income of the company in that year?

A Rs.12, 50,000

B Rs.20, 62,500

C Rs.16, 50,000

D Rs.18, 25,000

E None of these

Solution

Correct Answer: Option B

Total income = Profit earned + Total investment in the year.

Investment = (Profit earned/Profit percentage) × 100

Profit percentage of B in 2006 = 65%

⇒ Investment by B in 2006 = (812500/65) × 100 = 12, 50,000

Total income in 2006 by Company B = 8, 12,500 + 12, 50,000 = Rs.20, 62,500

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