Joint Venture Profit Share Calculation
The problem involves calculating the share of profit for one partner in a three-way joint venture based on a given profit-sharing ratio.
Understanding the Profit Ratio
The partners agree to share profits in the ratio 3:2:2. This means for every 7 parts of profit (3 + 2 + 2), the first partner gets 3 parts, the second partner gets 2 parts, and the third partner gets 2 parts.
Calculating the Second Partner's Share
The total profit earned by the venture is Rs. 1,40,000.
- The total number of parts in the profit-sharing ratio is \(3 + 2 + 2 = 7\).
- The second partner (who contributes time and strategy) is entitled to 2 parts out of these 7 parts.
- To find the second partner's profit, we calculate their proportional share of the total profit.
The calculation is as follows:
Share of Second Partner = (Second Partner's Ratio Part / Total Ratio Parts) * Total Profit
Share = \( \frac{2}{7} \times 1,40,000 \)
Share = \( 2 \times \frac{1,40,000}{7} \)
Share = \( 2 \times 20,000 \)
Share = Rs. 40,000
Therefore, the strategizing (second) partner should receive Rs. 40,000.
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