Question

Vijay inherited a large amount of wealth from his father and by establishing a soft drinks company, he squared his wealth. He then started a company which manufactured airplane toys and incurred huge losses amounting to k (>0) times the wealth he inherited from his father. His total assets now stand at a debt of 4 crore. Comment on the value of k.

• A. Any value of “k” is possible
• B. Depends on what amount is inherited initially - “x”
• C. k is any value greater than or equal to 4
• D. None of the above

Answer 1

The correct option is C

k is any value greater than or equal to 4

Let the wealth inherited by Vijay be ‘x’ crores.

Total wealth after establishing soft drinks company = $x^2$

Loss incurred by toys manufacturing company = $kx$.

Net assests = $x^2-kx$.

According to question:

$\Rightarrow x^2-kx=-4$
$\Rightarrow x^2-kx+4=0$
For this scenario to be possible, the value of $D\ge 0\Rightarrow k^2-16\ge 0$

$\Rightarrow k^2\ge 16$
$\Rightarrow k\ge 4\because k>0$
Hence k can take any value greater than or equal to 4.