Question

The investment of A is twice as that of B and thrice as that of C, B invested for twice the months that A and thrice the months than C, who will earn the highest profit.

Answer 1

Hint: Multiply the investment ratio with the month ratio. ROI tries to directly measure the amount of return on a particular investment, relative to the investment's cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio. There are five basic ratios that are often used to pick stocks for investment portfolios. These include price-earnings (P/E), earnings per share, debt-to-equity and return on equity (ROE).

Complete step by step solution: The three main categories of ratios include profitability, leverage and liquidity ratios. Knowing the individual ratios in each category and the role they plan can help you make beneficial financial decisions concerning your future.
According to the question.
A) Invests twice than B and thrice of C.
B) Invests for twice the month an invested and thrice the month C invested
Investment ratio $=\text{A:B:C}=6:3:2$
Month ratio: 3: 6: 2
Then,
$6\times 3:3\times 6:2\times 2$
$=18:18:4$ (Taking 2 common)
$=9:9:2$
Then both A and B are equal.

Hence A and B get the equal and highest profit.

Note: In this type of question, be careful about what the ratio says, it is sometimes a bit confusing. Generally, an interest coverage ratio of at least two (2) is considered the minimum acceptable amount for a company that has solid, consistent revenues. In contrast, a coverage ratio below one (1) indicates a company cannot meet its current interest payment obligations and, therefore, is not in good financial health.