Rahmel Becker and Heather Morrow decide to form a partnership. Becker will contribute $300,000 to the partnership,

Question:

Rahmel Becker and Heather Morrow decide to form a Becker will contribute $300,000 to the while Morrow will contribute only $30,000. However, Morrow will be responsible for running the day-to-day operations of the which are anticipated to require about 45 hours per week. In contrast, Becker will only work five hours per week for the The two partners are attempting to determine a formula for dividing net income. Becker believes the partners should divide income in the ratio of 7:3, favoring Becker, since Becker provides the majority of the capital. Morrow believes the income should be divided 7:3, favoring Morrow, since Morrow provides the majority of effort in running the business.
How would you advise the partners in developing a method for dividing income?

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...