Amalgamated Corporation's net income was $2,400,000 in 2009 and $800,000 in 2010. What percentage increase in net income must Amalgamated achieve in 2011 to offset the decline in profits in 2010?
A) 75%.
B) 300%.
C) 33.33%.
D) 800%.

Question

Quizplus · Accepted Answer

To offset the decline in profits in 2010, Amalgamated Corporation needs to bring its net income back to the level of 2009, which was $2,400,000.

Let x be the percentage increase in net income Amalgamated must achieve in 2011.

Then, we have:

2010 net income + (percentage increase)(2010 net income) = 2009 net income

$800,000 + (x/100)($800,000) = $2,400,000

Solving for x, we get:

x = 300%

Therefore, Amalgamated Corporation must achieve a 300% increase in net income in 2011 to offset the decline in profits in 2010.

Amalgamated Corporation's Net Income Was $2,400,000 in 2009 and $800,000