Three partners A, B, and C invest Rs. 40,000, Rs. 80,000, and Rs. 1,20,000 respectively in a business. After one year, B withdraws Rs. 40,000, and after two years, C withdraws Rs. 80,000. What will be the profit-sharing ratio among A, B, and C at the end of three years?

Explanation

To find the profit ratio, calculate each partner's effective investment over the 3 years. A invests Rs. 40,000 for the entire 36 months. B invests Rs. 80,000 for 12 months and Rs. 40,000 for the remaining 24 months. C invests Rs. 1,20,000 for 24 months and Rs. 40,000 for the last 12 months. The ratio becomes (40000×36) : (80000×12 + 40000×24) : (120000×24 + 40000×12) = 1440000 : 1920000 : 3360000, which simplifies to 3:4:7.