Question - Calculating Profit, Selling Price, and Discount on Handbags
Solution:
To solve this question, we first need to calculate the cost price of the handbags, then determine the selling price that would result in a 24% profit, and finally apply the discount to find out the price that should be marked on the label.The cost price (CP) is given as R172.00.Next, we calculate the selling price (SP) for a 24% profit.Profit is calculated by the formula: Profit = SP - CPWe know the Profit should be 24% of CP. So, the equation for profit becomes:0.24 * CP = SP - CPNow, let's insert the value of CP (R172.00) into this equation:0.24 * 172 = SP - 172Solving for SP gives us:41.28 = SP - 172SP = 172 + 41.28SP = 213.28This is the price before discount at which the merchant should sell the handbags to gain a 24% profit. However, the merchant wants to offer a 14% discount on this selling price. Discount is calculated by the formula: Discounted Price = Original Price - (Discount Percentage * Original Price)Let's apply the 14% discount to the SP of R213.28:Discounted Price = 213.28 - (0.14 * 213.28)Calculating the discount amount gives us:Discount Amount = 0.14 * 213.28Discount Amount = 29.8592Now we can determine the discounted price to be marked on the label:Discounted Price = 213.28 - 29.8592Discounted Price = 183.4208Since the listed choices are rounded to two decimal places, the price that should be marked on the label is R183.42.Hence, the correct answer is:a. R183.42
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