QUESTION 4

a) Company ABC offers a series of discounts of 30% , 5% and 5% on a type of

refrigerator while Company XYZ offers a trade discounts of 30% and 10% on
the same type of refrigerator . The list price of refrigerator from company ABC
and XYZ is RM2220 and RM2290 respectively.
 Find the net price of the item for both company?
NET PRICE = LIST PRICE (1- TRADE DISCOUNT)
= L (1- d )

COMPANY ABC :

NET PRICE = 2220 ( 1 – 0.3 )( 1 – 0.05 )( 1 – 0.05 )

= 2220 ( 0.7 )( 0.95 )( 0.95 )

= 222O ( 0.63175 )

= RM 1402.49

COMPANY XYZ :

NET PRICE = 2290 ( 1 – 0.3 )( 1 – 0.1 )

= 2290 ( 0.7 )( 0.9 )

= RM 1442.70

 What additional discount percent must be offered by the company that sells
at a higher net price in order to meet the competitor’s price?

COMPANY XYZ :

NET PRICE = 2290 ( 1 – 0.3 )( 1 – 0.1 )( 1 – 0.028 )

= 2290 ( 0.7 )( 0.9 )( 0.972 )

= 2290 ( 0. 61236 )

= RM 1402.30

Additional discount percent = 2.8%

b) A company received an invoice of RM x including transportation cost of RM55
dated 26 March 2022 for the purchase of an item . The invoice offered trade
discount of 15% and cash discount terms 5/10 , 3/20 and n/30 . On 13 April
2022 , the company paid RM4535 to settle the invoice . What was the amount of
the inverse?

TOTAL OF DAY =

MONTH TOTAL OF
DAY
31/3 – 26/3 5
13/4 13
Total 18

Cash discount = 3%

NET PRICE = L ( 1 - d )( 1 - c )
4535 = L ( 1 – 0.15 )( 1 – 0.03)
4535 = L ( 0.85 )( 0.97 )
4535 = L ( 0.8245 )
L = 4535 ÷ 0.8245
L = RM5500.30