An Invoice Shows a Net Price of $199

question 124

Short Answer

An invoice shows a net price of $199.16 after discounts of 22%, 7%, and 5% are deducted.
a) What was the list price of the goods?
b) What single discount would be equivalent to the discount series?

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Definitions:

Premiums

Regular payments made to an insurance company in exchange for coverage, or the additional cost paid for products or services perceived as offering greater value.

Adverse Selection

A scenario in economics where buyers and sellers have access to different information, leading to transactions where the seller is likely to sell goods of lower quality.

Moral Hazard

The risk that a party insulated from risk may behave differently than if they were fully exposed to the risk.

Market Efficiency

Market efficiency refers to the extent to which market prices reflect all available, relevant information, making it impossible to consistently achieve higher returns on investment without taking additional risk.