# 1.6 Review Exercises

1. An invoice for $15,000 dated June 16 has terms of $3/15, 2/30, n/45$. What payment in full is required if the payment is received on July 3? Click to see Answer$14,700

2. An invoice for $37,650 is dated June 24 with terms of $2/10, 1/30, n/60$. If a payment of$20,000 is made on July 2 and another payment of $10,000 is made on July 23, what is the balance remaining on the invoice? Click to see Answer$7,140.83

3. What amount must be remitted if invoices dated January 25 for $1,700, February 1 for$1,800, and February 15 for $900, all with terms of $3/25, n/50$ are paid with the same cheque on March 12? Assume it is a non–leap year. Click to see Answer$4,427.84

4. An invoice for $13,398.25 dated August 27 with terms of $5/10, 2/25, n/45$ was partially paid on September 7. If the invoice balance was reduced to$2,598.25, what was the amount of the payment?

$10,584 5. An invoice for$147,477.77 dated July 26 with terms of $5/15, 3.5/25, 2/40, n/60$ was partially paid with two equal payments on August 10 and September 4, reducing the balance owing to $76,579.81. What amount was paid on each of the two dates? Click to see Answer$34,200

6. The Gap is purchasing an Eminem graphic T-shirt for its stores. If the list price for the T-shirt is $34.50 and the Gap can receive a 40% trade discount, what net price will the Gap pay? Click to see Answer$20.70

7.  Nike has been approached by a retailer who wants to carry their Shox brand. The retailer needs a trade discount of 30% and its wholesaler needs 15%. The retailer also wants a 5% quantity discount. If the list price for the shoes is $195.00, what is the wholesale (net) price that Nike will charge? Click to see Answer$110.22

8. If the regular price of a product is $775.00 and it is eligible to receive discounts of 14%, 8%, and 5%, what single discount percentage is equal to the multiple discount percentages? Show calculations that show how the single and multiple discounts produce the same net price. Click to see Answer 24.84%,$582.52

9. Subway wants to price a new 12 inch sandwich. The cost of all the ingredients is $1.23. Expenses are 200% of cost, and Subway wants to earn a profit of 187% of cost. What is the regular selling price of the new sandwich? Click to see Answer$5.99

10. If the cost of a Bose Wave music system is $27.82 and the list price is$49.99, determine the markup amount. Express the markup both as the rate of markup on cost and the rate of markup on selling price.

$22.17, 79.69%, 44.35% 11. Rogers Communications is thinking about having a special promotion on its Digital One Rate 250 Plan, which offers 250 minutes of cellular calling. If the current price is$85.00 per month and Rogers wants to put it on special for $75.00 per month, what is the rate of markdown? Click to see Answer 11.76% 12. An iMac has a list price of$774.99 with available trade discounts of 20% to the retailer and an additional 15% to the wholesaler.
1. What price should a retailer pay for the product? What is the dollar value of the discount?
2. What price should a wholesaler pay for the product? How much less than the retailer’s price is this?
3. Overall, what single discount percent does the wholesaler receive?

a. $619.99,$155; b. $526.99,$93 less; c. 32%

13. The marketing manager for Tim Hortons is attempting to price a cup of coffee. She knows that the cost of the coffee is $0.14 per cup, and expenses are 30% of the regular selling price. She would like the coffee to achieve an 88.24% markup on selling price. 1. What is the regular selling price for a cup of coffee? 2. What is the profit per cup? 3. What is the rate of markup on cost? Click to see Answer a.$1.19; b. $0.69; c. 750% 14. Jonathan needs a new business suit for a presentation in his communications course. He heads to Moores and finds a suit on sale for 33% off. The regular price of the suit is$199.50.
1. What is the sale price?
2. What is the dollar amount of the markdown?

a. $133.67; b.$65.83

15. Birchwood Honda needs to clear out its Honda generators for an end-of-season sale. If the dealership pays $319.00, has expenses of 15% of cost, and profits of 30% of the regular unit selling price, what rate of markdown can the dealership advertise if it wants to break even during the sale? Click to see Answer 30% 16. A retailer purchasing the Halo 3 video game is eligible to receive a trade discount, quantity discount, and loyalty discount. If the net price of the game is$22.94, the list price is $39.99, the trade discount is 25%, and the quantity discount is 15%, what percentage is the loyalty discount? Click to see Answer 10.02% 17. Indigo is stocking a new hardcover book. The book has a cover price of$44.99 and Indigo is eligible to receive discounts of 25%, 8%, 4%, and 1%. Expenses are 20% of cost. The book sells for the cover price.
1. What is the profit per book?
2. Some new books are launched at 30% off the cover price. From a strictly financial perspective, would it be wise for Indigo to use this approach for this book? Why or why not?

a. $9.59; b. -$3.91

18. Mary is shopping for a new George Foreman grill. While shopping at Polo Park Shopping Centre, she came across the following offers at three different retail stores:
• Offer #1: Regular price $149.99, on sale for 30% off. • Offer #2: Regular price$169.99, on sale for 15% off plus an additional 30% off.
• Offer #3: Regular price $144.95, on sale for 10% off plus an additional 15% off. Mary also gets a 5% loyalty discount at this store. Which is the best offer for Mary? Click to see Answer Offer #2 has lowest price of$101.14