Question

Teddy's Towing Services had a gross annual profit of $394,840. If the annual operating expenses were $196,900, what was the net profit?$197,940$296,840$98,640$591,740None of these choices are correct.

Answer 1

We would apply the formula for finding net profit which is expressed as

Net profit = gross profit - expenses

In this case, it is

net profit = gross annual profit - annual operating expenses

From the information given,

gross annual profit = $394,840

annual operating expenses = $196,900

Thus,

Net profit = 394840 - 196900

Net profit = $197940

The first option is correct