Final answer:
The percentage change in operating income is approximately 41.27%. To find next year's expected operating income, this percentage increase is applied to this year's operating income. If the current year's operating income is $50,000, next year's expected operating income would be $70,635.
Step-by-step explanation:
To calculate the operating income expected next year, based on the percent change in operating income from the previous period, we first need to determine the actual percentage change. The provided calculation shows a change in income from $25,000 to $38,000. The correct calculation of percentage change in income is by subtracting the original income from the new income, divided by the average of the original and new income, and then multiplied by 100.
The provided equation is incomplete, but it suggests using the following formula: Percentage change in income = [(New Income - Original Income) / Average Income] × 100. Based on the information, the average income is ($38,000 + $25,000) / 2 = $31,500. The change in income is $38,000 - $25,000 = $13,000.
Therefore, the correct calculation is: ($13,000 / $31,500) × 100 which equals approximately 41.27%. To calculate the expected operating income for next year, we would apply this percentage change to this year's operating income. If this year's operating income was, for instance, $50,000, next year's would be $50,000 plus 41.27% of $50,000, which is $70,635.