In Addition to the Basic Trade Discount of 20%, an Outboard

question 104

Short Answer

In addition to the basic trade discount of 20%, an outboard motor manufacturer gives a boat dealer an additional discount of 12.5% for providing follow-up warranty service, and a 5% discount for cooperative advertising and boat-show promotions.
a) After the basic trade discount, what further price reduction (in dollars) does the 12.5% discount represent on a $1,000 list price motor?
b) After the first two discounts, what price reduction does the 5% discount give on the $1,000 motor?

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