Buffy Rich wants to buy a new line of stereos for her shop. Manufacturer A offers trade discounts of 20/14, and Manufacturer B offers trade discounts of 25/7. Assuming both manufacturers have the same list price, which manufacturer should Buffy buy from?

Question

Quizplus · Accepted Answer

Manufacturer A has the larger trade discount as its chain discount rate is .80 times .86, or .688, which when subtracted from 1 equals .312, whereas Manufacturer B's chain discount rate is .75 times .93, or .6975, which when subtracted from 1 equals only .3025.

Buffy Rich Wants to Buy a New Line of Stereos