Question

A company makes a loss of 2 million dollars in its first year of trading. In the following two years it makes a profit of $625 000 per year. What is the average profit or loss per year made by the company over the three years?

Answer 1

Answer: They lose $250000 per year over the three years!

Explanation:

First, find the total profit for the two following years

Take $625000 times 2 = $1250000

Next, find the total they made in 3 years

Take -$2000000 of the first year + $1250000 = - $750000

Now we find their average profit per year

Take -$750000 divided by 3 = -$250000

They lose $250000 per year over the three years