Videos: Trade and Cash Discounts

1. A company makes snowboards that retail at $1250.  The company offers chained discounts of 30% and 5% to its retailers.

  1. Calculate the price a retailer would pay for the snowboards.
  2. What single discount (single equivalent discount) is equivalent to these two discounts?
  3. What is the percent markup of the retailers?
  4. Due to a slowdown in sales the manufacturer would like to increase the total discount given to its retailers to 40%.  What additional chained discount must they offer?

2.   On November 3, the Springfield power plant receives 10 fuel rods.  The rods have a list price of $20,000 each with discounts of 5% and 10% and payment terms of 2/10, 1/15 net 30.

  1. What is the last day the invoice can be paid?  How much must be paid?
  2. What is the last day the 2% discount may be taken?  How much must be paid?
  3. If the supplier offers cash discounts on partial payments and $100,000 is paid after 5 days and another $50,000 15 days after the invoice date.  How much will Springfield owe at the end of 30 days?

3.  An invoice for $10,000 has payment terms 3/10, 2/20, n/45. Discounts are allowed for partial payments. The company made a payment of $3,000 9 days after the date of invoice, and a second payment 18 days after the date of the invoice that reduced the balance owing to $2,000. What is size of the second payment?

 

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