20. A holding company Hhas two subsidiaries S1 and S2• The subsidiaries also own a portion of the share capital of H. The percentage ownership of the group is as given below:

If the separately earned net profits of H, S1 and S2 are Rs 30,000, Rs 17,500 and Rs 5,000, respectively, find the total net profit of each company (separately earned profit plus share in the profits of other companies) using Markov chains analysis. Also, veri:tY that the sum of the profits allocated to the outside shareholders equals the sum of the separately earned profits of all the companies.

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Owners of shares Percentage of share capital held in company H S S H S 0 60 80 3 0 10 S 6 10 0 Outside shareholders 91 30 10 Total 100 100 100