a. Calculate the equivalent discount rate that represents these three discounts. % Round to two decimal places b. Calculate the net price of the shipment. $ Round to the nearest cent

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question
A restaurant purchased a shipment of potatoes for $150 less discounts of
13%, 6%, and 2%.
a. Calculate the equivalent discount rate that represents these three
discounts.
Round to two decimal places
b. Calculate the net price of the shipment.
$
Round to the nearest cent
Transcribed Image Text:A restaurant purchased a shipment of potatoes for $150 less discounts of 13%, 6%, and 2%. a. Calculate the equivalent discount rate that represents these three discounts. Round to two decimal places b. Calculate the net price of the shipment. $ Round to the nearest cent
Expert Solution
Step 1

In case of 3 discounts, suppose x%, y%, z%,

First of all we calculate a discount rate using first 2 discount rates i.e. x% and y%. Lets name it as g%.

So, g% = ( x + y - xy ÷ 100)%

Then we calculate equivalent diacount rate using g% and z%:

Equivalent Discount Rate:

    = ( g + z - gz ÷ 100) %

Then we apply this rate to find discount on the transaction.

 

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