A firm's financial data for 2004-2006 is given in the chart here. If

Given table shows a total cost of 1800 for 3 years. So average is 600 per year. At 25% increase the new average would be 1.25*600= 750. So total for the next 5 years will be 5*750= 3750
Add the current total for 3 years, 1800.
The total cost for 5 years= 5550
Average profit for 8 years is 1000
So total profit for 8 years will be 8000.
Cost + Profit should be the Revenue.
So 8000+5550= 13550 should be the total revenue for 8 years.
But the revenue for 3 years as per table is 2100
So total revenue for remaining 5 years must be 13550-2100= 11450
So average revenue for 5 years will be 11450/5=2290
Hence D

Posted from my mobile device

A simple method can be

Avg Revenue from 2004-06 = (400+900+500)/3=1800/3=600
Avg cost increases to = 600 * 1.25 ( 25% Avg increase )
= 750 Avg for yr 2007-2011

For 2004 P= 300-400=-100 , For Profit Avg profit to be 1000, profit shortfall = 1100
For 2005 P= 700-900=-200 , For Profit Avg profit to be 1000, profit shortfall = 1200
For 2006 P= 1100-500= 600 , For Profit Avg profit to be 1000, profit shortfall = 400

In total profit shortfall from 2004-2006 = 1100+1200+400 = 2700
Extra Avg coverage for 2700 shortfall from 2007-2011 = 2700/5= 540 (A)
Revenue coverage from 2007-2011 = 750 (B)
Profit required from 2007 to 2011= 1000 (C)

Average Revenue required from 2007 to 2011 = A+B+C = 540+750+1000= 2290

Language is confusing because prima facie, it looks as if overall average profit is being referred for 2007-2011, which is not the case.

First 3 years:

Total cost = 400 + 900 + 500 = 1,800
Average cost = 1,800/3 = 600
Total revenue = 300 + 700 + 1,100 = 2,100
Total profit = 2,100 – 1,800 = 300

Next 5 years:

Average cost = (1.25)600 = 750
Average revenue = x
Average profit = Average revenue – Average cost = x – 750

The (overall) 8-year-long period:

Average profit = Total profit/8

[300 + 5(x – 750)]/8 = 1,000
300 + 5x – 3,750 = 8,000
5x = 11,450
x = 2,290

Answer: D