A and B share profits in the ratio 2:5. C is allotted \(\frac{2}{7}\) of the total profit, and the remaining profit is shared in the old ratio. What will be the new profit-sharing ratio?

Correct answer: 10:25:14

C receives \(\frac{2}{7}\), so the remaining profit for A and B is \(1-\frac{2}{7}=\frac{5}{7}\). Dividing this remainder in the old ratio 2:5 gives A’s share as \(\frac{5}{7}\times\frac{2}{7}=\frac{10}{49}\) and B’s share as \(\frac{5}{7}\times\frac{5}{7}=\frac{25}{49}\). C’s share is \(\frac{2}{7}=\frac{14}{49}\). Therefore, the new ratio is 10:25:14. Option B incorrectly retains the old ratio without applying the reduced remainder. Exam tip: First calculate the share left for the old partners, then distribute it in their old ratio.