7
QuizMultiple Choice

Business Finance and Economics — Test

Question 7 • Advanced Financial Algebra

A hardware store purchases a drill for $⁢80 and marks it up by 60% They then offer a 20% discount on the marked-up price. The store manager calculates the final sale price as $⁢64 The manager's steps are shown below: Calculate the marked-up price: $⁢80+($⁢80⋅0.60)=$⁢128 Apply the discount: $⁢128−($⁢128⋅0.50)=$⁢64 Identify the mistake in the manager's calculation.

Answer
A
The manager applied a 50 percent markup instead of a 60 percent markup.
B
The manager applied the discount to the original price instead of the marked-up price.
C
The manager applied a 50 percent discount instead of a 20 percent discount.
D
The manager used the wrong initial price.
Previous
Next