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Question - The partnership agreement of A and B states the following:
Monthly salary of 10,000 for A.
20% bonus to A, before deductions for salary, interest, and bonus.
10% interest on the weighted average capital of B.
Balance is shared equally.
B's weighted average capital balance is 200,000. The partnership reported profit of 60,000 for the year, net of salaries, bonus and interest. How much is the share of B in the profit?
Question - Explain the concept of time value of money. What does interest compensate the lenders for
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