100% of something is basically the same as saying "1 times that number". This is because 100% = 1.0 or just 1. So the number will not change if you take 100% of it.
Any percent smaller than 100% will convert to a decimal number smaller than 1, which makes the final result smaller. Conversely, any percent larger than 100% is going to convert to a decimal larger than 1, making the final result larger.
The percent 175% converts to the decimal form 1.75 after you move the decimal to the left 2 spots. Multiply this value by last year's headcount (320) and we get...
175% of 320 = 1.75*320 = 560
Answer: Choice C) 560