A major record label has seen its annual operating profit decrease in recent yea

Question

A major record label has seen its annual operating profit decrease in recent years, likely because of greater accessibility of music online. In 2011, the label's operating profit was $124 million. By 2015, the label's operating profit had decreased by 45 %. a. What was the record label company's operating profit in 2015? b. Suppose the record label wants to increase its operating profit to $124 million by 2017. By what percent must the label's operating profit increase from its 2015 value to reach $124 million within the next two years?

Explanation / Answer

in 2011 profit = $124 million

Decrease by 45% in 2015

a) So, profit in 2015 = 124 - (45/100)*124 = $ 68.2 million

b) Profit increase to $124 illion by 2017

Profit increase from 2015 = 124 - 68.2 = $ 55.8 million

percentage increase in next two years = (55.8/68.2)* 100 = 81.8 % increase

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