The Price of a New Textbook Increased by 25 Percent

question 408

Multiple Choice

The price of a new textbook increased by 25 percent and the price of a used textbook increased by 30 percent. What happened to the relative price of the new textbook?

• A)It increased by 5 percent.
• B)It increased, but we can't tell by how much without more information.
• C)It decreased by 5 percent.
• D)It decreased, but we can't tell by how much without more information.

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Definitions:

Taxable Corporate Bond

A fixed-income security issued by a corporation that is subject to taxes on the interest income received by the bondholder.

Pretax Equivalent

Pretax Equivalent is a term used in finance to describe the gross amount of income or yield before taxes are deducted, useful for comparing investments with different tax treatments.

Uncollected Receivables

Amounts owed to a company by customers for goods or services delivered but not yet paid for.

Written Off

Refers to the elimination of an asset's value from a company's balance sheet due to it being unrecoverable or having no further use.