Big Box Corporation has two owners who share the work equally. Andrea owns 80% of the company shares, and Sheryl owns 20% of the company shares. Andrea invested 60% of the money required to start the business. If the company makes $100,000 profit this year and decides to distribute it all to the owners, how much will Andrea get?
A) $20,000
B) $60,000
C) $80,000
D) $100,000

Question

Quizplus · Accepted Answer

Since Andrea owns 80% of the company shares, she will receive 80% of the profit distribution. Since she invested 60% of the money required to start the business, she will also receive 60% of the profit distribution based on her investment. Therefore, Andrea will receive 80% + (60% of the remaining 20%) = 88% of the profit distribution. 88% of $100,000 is $88,000, so Andrea will receive $80,000.

Big Box Corporation Has Two Owners Who Share the Work