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If each of the companies A and B invested Rs.25 lakhs in 2010, what was the average profit earned by the two companies?

A Rs.18 lakhs

B Rs.22.5 lakhs

C Rs.17.5 lakhs

D Rs.20 lakhs

E None of these

Solution

Correct Answer: Option D

Profit earned = (Investment × Profit percentage) ÷ 100

Profit percentage of A in 2010 = 90%

Profit percentage of B in 2010 = 70%

Given Investment of both companies = 25 lakhs

⇒ Profit earned by A in 2010 = (25 × 90)/100 = 22.5 lakhs

⇒ Profit earned by B in 2010 = (25 × 70)/100 = 17.5 lakhs

Total profit earned by A and B in 2010 = 22.5 + 17.5 = 40 lakhs

∴ Average profit of A and B in 2010 = 40/2 = 20 lakhs

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