Answer: Option B
Let the original average expenditure per student be Rs. x. Then, the total expenditure of the hostel would be 100x.Given that to accommodate 20 more students, the average expenditure per student decreases by Rs. 5. Let the new average expenditure per student be Rs. (x - 5). Then, the new total expenditure of the hostel would be (100 + 20)(x - 5) = 120(x - 5) = 120x - 600.Also, given that the total expenditure increased by Rs. 400. Therefore, we have the equation:120x - 100x = 400 + 600=> 20x = 1000=> x = 50So, the original average expenditure per student was Rs. 50.The new average expenditure per student is Rs. (50 - 5) = Rs. 45.Therefore, the new total expenditure of the hostel is (100 + 20) * 45 = Rs. 5400.Hence, the correct option is (B) Rs. 5400.
Important formulas:

• Average expenditure = Total expenditure / Number of students
• Increase in expenditure = New expenditure - Original expenditure

Definitions:

• Average expenditure: The total expenditure divided by the number of units.
• Total expenditure: The sum of all the expenditures made on a particular item or group of items.
• Increase in expenditure: The amount by which the new expenditure exceeds the original expenditure.

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