A Retailer Pays a Wholesaler $24

question 10

Multiple Choice

A retailer pays a wholesaler $24.00 for an item and then sells it with a 25 percent markup. The retailer's selling price is:

• A) $32.00.
• B) $56.00.
• C) $48.00.
• D) $30.00.
• E) None of these alternatives is correct.

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Definitions:

Earnings

The profit a company generates during a particular period, often used as a measure of its financial performance.

Effective Rate

The effective rate is the actual interest rate that a borrower pays on a loan or receives on a deposit account, after the compounding of interest is taken into account.

Contract Rate

The interest rate specified in a financial contract, notably in loans or leases, that must be paid over the duration of the agreement.

Effective Interest Method

A way of amortizing the bond premium or discount over the life of the bond in a manner that reflects a constant rate of interest.