MGT 101 GDB idea solution spring 2011

[Vuhelper]

Let TotaProfit =1
Mr. C share =1/5th
Remaining Share =1-1/5
Remaining Share =4/5
Mr A new Share =2/5 of 4/5
Mr A new share =8/25
Mr B new share =3/5 of 4/5
Mr B new share =12/25
Mr C share =1/5
New Profit sharing Ratio of Mr A Mr B and Mr C
8/25:12/25:1/5=8:12:5
Mr A sacrificed =2/5-8/25
Mr A sacrificed =10-8/25
Mr A sacrificed =2/25
Mr B sacrificed =3/5-12/25
Mr B sacrificed =15-12/25
Mr B sacrificed =3/25
So sacrificing ratio =2:3
Sacrificing ratio of existing partners is same as their existing Ratio