Problem: Tutor, Incorporated (TI) provides instructional services to its customers. TI charges $270 per student. The Company expects to serve 850 students during the coming year. All of the Company's expenses are fixed. Total annual fixed costs are projected to be $95,000. If the estimated number of students increases by 20%, net income will increase by:
1) 20%.
2) 34%.
3) 60%.
4) 40%.