An Electronics Store Purchases a Certain Video Game from the Manufacturer

question 29

Multiple Choice

An electronics store purchases a certain video game from the manufacturer, but in a mass amount of clutter the original purchase price is lost. The store sells the game at a mark-up of 200% over the purchase price. A coupon which the store offers in the local newspaper will reduce the price by 20%. With the coupon, the profit made on the sale of the video game is $18. What was the original purchase price of the video game? Give your answer as a decimal rounded to the nearest hundredth.

• A) $8.00
• B) $16.25
• C) $12.45
• D) $12.86
• E) None of the above.

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Definitions:

Capital Lease

A lease classified by lessees as an asset purchase, indicating that the lessee effectively has control over the asset during the lease term.

Interest Revenue

Income earned from deposit accounts or investments through the interest paid by the borrower to the lender.

Incremental Borrowing Rate

The interest rate a lessee would have to pay if borrowing over a similar term, and with similar security, the funds necessary to lease or purchase an asset.