Wilson Sells a Basketball to a Wholesaler for $16, and the Wholesaler

question 19

Multiple Choice

Wilson sells a basketball to a wholesaler for $16, and the wholesaler applies a 20 percent markup. A retailer then applies a 33.3 percent markup. The final selling price is:

• A) $24.53.
• B) $30.00.
• C) $25.59.
• D) $28.00.
• E) Cannot be determined from the information given.

---

Definitions:

Cash Operating Costs

Expenses directly associated with the operation of a business that require cash outlay, including rent, utilities, and payroll.

Useful Life

The estimated duration of time an asset is expected to be economically useful to an entity.

Simple Rate

A basic interest rate or return percentage applied to an investment or loan without compounding over a specific period.

Profitability Index

A financial tool used to evaluate the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.