planning ahead inventory is an important part of many businesses. can you think of problems that...
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Planning Ahead
Inventory is an important part of many businesses.
Can you think of problems that might arise from having too much or too little of a product in stock?
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Lesson Objective
Compute the trade discount, the net price, and the trade-discount rate.
Content Vocabulary
list pricelist price
The price at which a business generally sells an item, also called the catalog price.
list price
The price at which a business generally sells an item, also called the catalog price.
trade discount
trade-discount rate
net price
trade discount
A discount from the list price.
trade discount
A discount from the list price.trade-discount rate
The amount of the discount of an item expressed as a percentage of the list price.
trade-discount rate
The amount of the discount of an item expressed as a percentage of the list price.
net price
The price actually paid for a discounted item.
net price
The price actually paid for a discounted item.
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Johnson Auto Repair Shop is purchasing an electronic ignition module for a sport coupe that is six years old. The list price in the wholesaler’s catalogue is $845.
Johnson receives a 40 percent trade discount.
What is the net price of the module?
Example 1Example 1
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Find the trade discount.
List Price × Trade-Discount Rate
$845 × 40% = $338.00
Example 1 Answer: Example 1 Answer: Step 1Step 1
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Find the net price.
List Price – Trade Discount
$845.00 – $338.00 = $507.00
Example 1 Answer: Example 1 Answer: Step 2Step 2
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Murray Plumbing receives an 18 percent trade discount from their wholesale supply company.
The list price on an item that Murray needs to purchase is $145.79.
What is the net price?
Practice 1Practice 1
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$119.55
Practice 1 AnswerPractice 1 Answer
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Find the trade discount and the net price.
List price: $105.59
Trade-discount rate: 32 percent
Practice 2Practice 2
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Trade discount: $33.79
Net price: $71.80
Practice 2 AnswerPractice 2 Answer