Amalgamated Corporation's profit was $2,400,000 in 2009 and $800,000 in 2010. What percentage increase in profit must Amalgamated achieve in 2011 to offset the decline in profits in 2010?

Question

Quizplus · Accepted Answer

To offset the decline in profits in 2010, Amalgamated Corporation needs to increase its profit by the amount it decreased in 2010, which is $2,400,000 - $800,000 = $1,600,000.

To find the percentage increase needed in 2011, we can use the formula:

percentage increase = (amount of increase ÷ original amount) x 100

In this case, the amount of increase needed is $1,600,000, and the original amount is $800,000.

Therefore,

percentage increase = ($1,600,000 ÷ $800,000) x 100 = 200%

So, Amalgamated Corporation needs to achieve a 200% increase in profit in 2011 to offset the decline in profits in 2010.

Since option B is the closest to 200%, it is the best choice. The other options are either too high or too low.

Amalgamated Corporation's Profit Was $2,400,000 in 2009 and $800,000 in 2010