A manufacturer estimates that consumers will accept a price of $275 for a snowboard. If the manufacturer expects to offer trade discounts of 35/15/5 to retailers, wholesalers, and jobbers, respectively, what price will the manufacturer receive for the snowboard?

Question

Quizplus · Accepted Answer

To find the manufacturer's price, apply the trade discounts sequentially:  1. Apply the 35% discount: $275 * (1 - 0.35) = $178.75  2. Apply the 15% discount: $178.75 * (1 - 0.15) = $151.94  3. Apply the 5% discount: $151.94 * (1 - 0.05) = $144.34  Thus, the manufacturer receives $144.34.

A Manufacturer Estimates That Consumers Will Accept a Price of $275