Solve the Problem

question 11

Multiple Choice

Solve the problem. Round rates to the nearest tenth of a percent and dollar amounts to the nearest dollar when necessary.
-An office supply store sells a computer disk for $87.95. If the cost is $60.67, find the percent of markup on cost and the equivalent percent of markup on selling price.

• A)69%, 31%
• B)45%, 31%
• C)69%, 145%
• D)45%, 69%

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Definitions:

Intrinsic Value

The actual, inherent value of a financial security, determined through fundamental analysis without reference to its market value.

Put Option

A financial contract that gives the buyer the right, but not the obligation, to sell an asset at a specified price within a specific time frame.

Actual Value

Actual value refers to the true, inherent, or market value of an asset, not influenced by external conditions such as market fluctuations or investor perceptions.

Time Value

A concept stating the value of money is affected by time, primarily due to the potential earning capacity of money over time.