Question

In which year, the difference between the income and expenditure was highest?

A.2006
B.2005
C.2007
D.2009

Answer 1

Hint: To find the year where the difference between income and expenditure was highest, we will find their difference each year and determine the year with maximum difference between income and expenditure. For a company if the income is more than the expenditure, then it is preferred that the difference between income and expenditure should be as high as possible to maximize their profit.

Complete step-by-step answer:
To find the year with maximum difference between their income and expenditure, we will do a year-by-year analysis and find out their difference each year.
In the year 2005, the income was around Rs.3000 crore and the expenditure was around Rs.2000, thus the difference between income and expenditure will be
 $\Rightarrow$ Rs.3000 - Rs.2000 = Rs.1000 crore.
In the year 2006, the income was around Rs.5000 crore and the expenditure was around Rs.4000, thus the difference between income and expenditure will be
 $\Rightarrow$ Rs.5000 - Rs.4000 = Rs.1000 crore.
In the year 2007, the income was around Rs.6500 crore and the expenditure was around Rs.4500, thus the difference between income and expenditure will be
 $\Rightarrow$ Rs.6500 - Rs.4500 = Rs.2000 crore.
In the year 2008, the income was around Rs.6000 crore and the expenditure was around Rs.5000, thus the difference between income and expenditure will be
 $\Rightarrow$ Rs.6000 - Rs.5000 = Rs.1000 crore.
In the year 2009, the income was around Rs.7500 crore and the expenditure was around Rs.6700, thus the difference between income and expenditure will be
 $\Rightarrow$ Rs.7500 - Rs.6700 = Rs.800 crore.
In the year 2010, the income was around Rs.5000 crore and the expenditure was around Rs.4200, thus the difference between income and expenditure will be
 $\Rightarrow$ Rs.5000 - Rs.4200 = Rs.800 crore.
Thus, the maximum difference between the income and expenditure of the company is Rs.2000 crore and it occurs in the year 2007.
Hence, option (C) is the correct option.

Note: Another way of finding the year with the greatest difference between the income and expenditure of the company is by measuring the distance between the income and expenditure each year from the graph. The greatest distance will indicate the greatest difference between the two values in a year and will also save time from actually calculating the difference for each year.