A craft shop buys stuffed animals with a list price of $8,000. If the wholesaler offers trade discounts of 25/25/25, find the net price factor.
well, yeah - taxidermy is expensive!
To find the net price factor, you need to subtract the trade discounts from 100% and convert them to decimal form.
The trade discount percentages are 25/25/25.
To find the net price factor, subtract each discount from 100%:
100% - 25% = 75%
75% - 25% = 50%
50% - 25% = 25%
Now, convert these percentages to decimal form:
75% = 0.75
50% = 0.50
25% = 0.25
The net price factor is the product of these decimal values:
Net price factor = 0.75 * 0.50 * 0.25 = 0.09375
Therefore, the net price factor is 0.09375.
To find the net price factor, we need to understand what the trade discounts of 25/25/25 mean.
The trade discounts of 25/25/25 indicate that there are three successive discounts applicable to the list price. Each discount is 25% of the previous discounted price. To calculate the net price factor, we need to apply each discount in sequence.
Let's go step by step:
1. First, apply the first discount of 25% to the list price:
List Price - (Discount 1) = List Price - (25/100) * List Price = List Price * (1 - 25/100)
2. Next, apply the second discount of 25% to the discounted price from step 1:
Discounted Price from step 1 - (Discount 2) = Discounted Price from step 1 - (25/100) * Discounted Price from step 1 = Discounted Price from step 1 * (1 - 25/100)
3. Finally, apply the third discount of 25% to the discounted price from step 2:
Discounted Price from step 2 - (Discount 3) = Discounted Price from step 2 - (25/100) * Discounted Price from step 2 = Discounted Price from step 2 * (1 - 25/100)
The net price factor is the final discounted price divided by the list price.
Therefore, the net price factor is calculated as follows:
Net Price Factor = (Discounted Price from step 3) / List Price
Please substitute the values into the equations above and carry out the calculations to find the net price factor.