What is the amount of the trade discount, including the incentive (in $)? $ (b) What is the trade discount rate (in percent)? Round to the nearest tenth of a percent. % (c) What is the net price (invoice price) to your dealership (in $)?
What is the amount of the trade discount, including the incentive (in $)? $ (b) What is the trade discount rate (in percent)? Round to the nearest tenth of a percent. % (c) What is the net price (invoice price) to your dealership (in $)?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Suppose a certain car manufacturer's incentive program designed to reduce inventory of certain low-selling models offers a $8,000 extra dealer incentive for each of these vehicles that the dealer moved into its rental or service fleets.
As the accountant for a dealership with a number of these vehicles left in stock, your manager has asked you to calculate certain invoice figures. The normal trade discount from this car manufacturer is 19%. If the average sticker price (list price) of these remaining vehicles at your dealership is $24,500, calculate the following.
(a) What is the amount of the trade discount, including the incentive (in $)?
$
(b) What is the trade discount rate (in percent)? Round to the nearest tenth of a percent.
%
(c) What is the net price (invoice price) to your dealership (in $)?
$
(d) If the cars were then sold from the fleets at $1,000 over "invoice" (net price), what is the total percentage savings to the consumer based on the list price? Round to the nearest tenth of a percent.
%
(e) Although these incentive prices reflect extraordinary discounts to the consumer, what other factors should a consumer consider before purchasing a "discontinued" brand of vehicle? (Select all that apply.)
o Availability of parts and service
o Net worth of the car dealership
o Vehicle will be worth less than comparable models that are not discontinued
o Vehicles may be more difficult to resell
o Total number of vehicles manufactured this year
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