Korey's comic book store has been up and running for 4 years. Korey feels that his store has been successful and is considering moving to a larger property to allow for greater inventory and customer opportunities in his business. He would like investors to cover the cost of his expansion.

The profits of Korey's comic book store for its first four years are outlined below. According to this information, what would be the best estimate for Korey to quote as expected profits in the next year in his new business plan?

Year

Net Profits

1

$14,250.00

2

$15,390.00

3

$16,621.20

4

$17,950.90

5

a.

$20,550.19

b.

$19,090.90

c.

$19,280.60

d.

$19,386.97

Question

Mathematics

Reid Suarez

27 September, 22:47

Korey's comic book store has been up and running for 4 years. Korey feels that his store has been successful and is considering moving to a larger property to allow for greater inventory and customer opportunities in his business. He would like investors to cover the cost of his expansion.

The profits of Korey's comic book store for its first four years are outlined below. According to this information, what would be the best estimate for Korey to quote as expected profits in the next year in his new business plan?

Year

Net Profits

1

$14,250.00

2

$15,390.00

3

$16,621.20

4

$17,950.90

5

a.

$20,550.19

b.

$19,090.90

c.

$19,280.60

d.

$19,386.97

+2

Answers (2)

Know the Answer?

Morgan Holloway · Answer 1

D. $19,386.97 is the right answer

had it on a test

Derrick · Answer 2

Year Net Profit

1 $14,250.00

2 $15,390.00

3 $16,621.20

4 $17,950.90 2

We need to get the increase of the net profit of the current year from the previous year.

Percentage increase = (Current year - Previous Year) / Previous Year * 100%

Year 2: (15,390 - 14, 250) / 14,250 * 100% = 0.08 * 100% = 8%

Year 3: (16,621.20 - 15,390) / 15,390 * 100% = 0.08 * 100% = 8%

Year 4: (17,950.90 - 16,621.20) / 16,621.20 * 100% = 0.08 * 100% = 8%

Every year the net income increases by 8%. So, the net income in Year 5 will be:

17,950.90 x 1.08 = 19,386.97 Choice D.