Profit Calculation and Increase

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Questions and Answers

What is the rival company's original profit?

$4800 (correct)
$3000
$4200
$6000

If the rival company's profit increases by 20%, what will be its new profit?

$5800
$6080
$5760 (correct)
$5760 (correct)

How much more than the rival company's new profit does the company's profit need to be?

$3500
$3000 (correct)
$2800
$2500

What is the difference between the company's profit and the rival company's new profit?

<p>$3000 (B)</p> Signup and view all the answers

How much will the company's profit need to increase to remain $3000 more than the rival company's new profit?

<p>$1400 (A)</p> Signup and view all the answers

Study Notes

Company Profits

A company's profit is $15000.
The company's profit is $3000 less than five times the amount of a rival company's profit.

Rival Company's Profit

The rival company's profit is 1/5 of ($15000 + $3000) = $18000 / 5 = $3600.
The rival company's profit increases by 20%.
The new profit of the rival company is $3600 + (20% of $3600) = $3600 + $720 = $4320.

Increase in Company's Profit

To remain $3000 more than the rival company's new profit, the company's new profit needs to be $4320 + $3000 = $7320.
The company's profit needs to increase by $7320 - $15000 = $5820.

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Description

Determine the required profit increase for a company to remain ahead of a rival company's new profit. The rival company's profit increases by 20%. Calculate the necessary increase to maintain the $3000 difference.