Applying the Profit and Loss Ratio Method,compute Taylor and Timmy's

question 20

Multiple Choice

Applying the profit and loss ratio method,compute Taylor and Timmy's share of net income if Taylor invested $200,000 and Timmy invested $800,000 and the profit and loss ratio is 3:2.Net income was $75,000.

• A)Taylor,$15,000;Timmy,$60,000
• B)Taylor,$37,500;Timmy,$37,500
• C)Taylor,$45,000;Timmy,$30,000
• D)None of these answers is correct.

---

Definitions:

Factor

An element or constituent that contributes to a result or outcome.

Population Means

The average value of a characteristic in a population, and a parameter that is often estimated from sample data.

ANOVA

Analysis of Variance, a statistical method used to compare means of three or more samples, testing the hypothesis that all samples are taken from populations with the same mean.

Equal Variances

A statistical assumption that the variances of the items being compared are the same across all levels or groups.