Three partners A, B, and C invest Rs. 40,000, Rs. 80,000, and Rs. 1,20,000 respectively in a business. At the end of the first year, B withdraws Rs. 40,000, and at the end of the second year, C withdraws Rs. 80,000. What will be the ratio of their profit sharing after 3 years?

Explanation

The profit sharing ratio depends on the effective capital invested by each partner over the 3 years. Considering the withdrawals, A's investment remains Rs. 40,000 for 3 years, B invests Rs. 80,000 for 1 year and Rs. 40,000 for 2 years, and C invests Rs. 1,20,000 for 2 years and Rs. 40,000 for 1 year. Calculating the weighted investments, the ratio comes out to be 3 : 4 : 7.