Question

In: Finance

14) On a new oak bookcase with a list price of $763, a series discount of...

14) On a new oak bookcase with a list price of $763, a series discount of 25/30/5 is offered to wholesalers while a series discount of 10/15 is offered to retailers. (10 pts) a) What is the wholesaler’s price? b) What is the retailer's price?

Solutions

Expert Solution

a) List Price = $763

We know that,Price after discount = Price before discount x (1 - discount)

Series discount for wholesaler's: 25/30/5

discount 1 = d1 = 25%, discount 2 = d2 = 30% , discount 3 = d3 = 5%

First we calculate the Price after discount 1 by considering discount d1 on List price

Price after discount 1 = List price x (1 - d1) = 763 x (1-25%)

Now we calculate price after discount 2 by considering discount d2 on price after discount 1

Price after discount 2 = Price after discount 1 x (1-d2) = List price x (1-d1)(1-d2) = 763(1-25%)(1-30%)

Finally we find the Price after discount 3 i.e. Wholesaler's price after considering discount d3 on Price after discount 2

Wholesaler's Price = Price after discount 2 x (1-d3) = List price x (1-d1)(1-d2)(1-d3) = 763(1-25%)(1-30%)(1-5%)

Wholesaler's Price = 763 x 75% x 70% x 95% = 763 x 49.875% = 380.54625 = $380.55 (rounded to two places off decimal)

b) List Price = $763

We know that,Price after discount = Price before discount x (1 - discount)

Series discount for Retailer's: 10/15

discount 1 = d1 = 10%, discount 2 = d2 = 15%

First we calculate the Price after discount 1 by considering discount d1 on List price

Price after discount 1 = List price x (1 - d1) = 763 x (1-10%)

Now we calculate price after discount 2 i.e retailer's price by considering discount d2 on price after discount 1

Retailer's Price = Price after discount 1 x (1-d2) = List price x (1-d1)(1-d2) = 763(1-10%)(1-15%)

Retailer's Price = 763 x 90% x 85% = 763 x 76.50% = 583.695 = 583.70 (rounded to two places off decimal)


Related Solutions

Problem 14-1 (Algo) Determining the price of bonds; discount and premium; issuer and investor [LO14-2] On...
Problem 14-1 (Algo) Determining the price of bonds; discount and premium; issuer and investor [LO14-2] On January 1, 2021, Instaform, Inc., issued 10% bonds with a face amount of $48 million, dated January 1. The bonds mature in 2040 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from...
Problem 14-1 Determining the price of bonds; discount and premium; issuer and investor [LO14-2] On January...
Problem 14-1 Determining the price of bonds; discount and premium; issuer and investor [LO14-2] On January 1, 2018, Instaform, Inc., issued 14% bonds with a face amount of $50 million, dated January 1. The bonds mature in 2037 (20 years). The market yield for bonds of similar risk and maturity is 16%. Interest is paid semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the...
The car dealer gave Unicorn a $2,000 cash discount off the $31,000 list price. However, Unicorn...
The car dealer gave Unicorn a $2,000 cash discount off the $31,000 list price. However, Unicorn paid an additional $6,000 to equip the car with a more luxurious interior and high tech lighting so it would have greater appeal. Unicorn Company expected the car to have a five-year useful life and a $5,000 salvage value. Unicorn also expected to use the car for 150,000 miles before disposing of it. Unicorn used the car, and it was driven 50,000 / 10,000...
For the series , go through the entire list of series tests, and say Why the...
For the series , go through the entire list of series tests, and say Why the test cannot be applied or Why the test can be applied List of Tests Geometric Series Test for Divergence Integral Test p-series Test Comparison Test Limit Comparison Test Alternating Series Test Absolute Convergence Test Ratio Test Root Test
Use a 5 percent discount rate to compute the NPV of each of the following series...
Use a 5 percent discount rate to compute the NPV of each of the following series of cash receipts and payments: Use Appendix A and Appendix B. $6,200 received now (year 0), $1,890 paid in year 3, and $4,000 paid in year 5. $10,000 paid now (year 0), $12,690 paid in year 2, and $31,000 received in year 8. $20,000 received now (year 0), $13,500 paid in year 5, and $7,500 paid in year 10. (For all requirements, round discount...
Use a 5 percent discount rate to compute the NPV of each of the following series...
Use a 5 percent discount rate to compute the NPV of each of the following series of cash receipts and payments: Use Appendix A and Appendix B. $6,200 received now (year 0), $1,890 paid in year 3, and $4,000 paid in year 5. $10,000 paid now (year 0), $12,690 paid in year 2, and $31,000 received in year 8. $20,000 received now (year 0), $13,500 paid in year 5, and $7,500 paid in year 10. (For all requirements, round discount...
Use a 5 percent discount rate to compute the NPV of each of the following series...
Use a 5 percent discount rate to compute the NPV of each of the following series of cash receipts and payments: Use Appendix A and Appendix B. $6,200 received now (year 0), $1,890 paid in year 3, and $4,000 paid in year 5. $10,000 paid now (year 0), $12,690 paid in year 2, and $31,000 received in year 8. $20,000 received now (year 0), $13,500 paid in year 5, and $7,500 paid in year 10.
Two dealers compete to sell you a new car with a list price of $42000. Dealer...
Two dealers compete to sell you a new car with a list price of $42000. Dealer A offers to sell it for $40000 if you pay cash. Dealer B offers to sell it to you for $44000 with a "0-percent financing" option: you will have to pay 48 equal monthly payments of $916.67. That is to say, Dealer B offers: 48×916.67=44000 Assume that the first monthly payment is one month after you take possession of the car. (a) Suppose that...
1. (14) List the elements for each of the following sets:
  1. (14) List the elements for each of the following sets: (1) P({a, b, c})                                                         (Note: P refers to power set) (2)   P{a, b}) - P({a, c}) (3)   P(Æ) (4) {x Î ℕ: (x £ 7 Ù x ³ 7}                        (Note: ℕ is the set of nonnegative integers) (5)   {x Î ℕ: $y Î ℕ (y < 10 Ù (y + 2 = x))}            (6)    {x Î ℕ: $y Î ℕ ($z Î ℕ ((x = y +...
A series of questions on sports and world events was asked of 14 randomly selected young...
A series of questions on sports and world events was asked of 14 randomly selected young adult naturalized citizens. The results were translated into sports and world ecents "knowledge" scores. The scores were: Citizen Sports World Events J.C. McCarthy 47 49 A.N. Baker 12 10 B.B. Beebe 62 76 L.D. Gaucet 81 92 C.A. Jones 90 86 J.N. Lopez 35 42 A.F. Nissen 61 61 L.M. Zaugg 87 75 J.B. Simon 59 86 J. Goulden 40 61 A.A. Fernandez 87...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT