Q2 - qz#6 - PB - Series of Discounts

Front

What is average annual depreciation?

Back

Average annual depreciation is the amount by which an asset's value decreases each year, calculated by taking the initial value of the asset, subtracting its estimated residual value, and dividing by the number of years of useful life.

Front

How do you calculate the total cost including tax?

Back

Total cost = Price + (Price x Tax Rate). For example, if a T.V. costs $1,299 and the tax rate is 6.625%, the total cost is $1,299 + ($1,299 x 0.06625) = $1,385.06.

Front

What is a trade-in value?

Back

Trade-in value is the amount a dealer offers for a used item (like a car) when a customer is purchasing a new item.

Front

How do you find the invoice price after trade discounts?

Back

To find the invoice price after trade discounts, apply each discount sequentially to the list price. For example, for a list price of $460 with discounts of 30%, 10%, and 5%, the invoice price is calculated as follows: $460 - (30% of $460) - (10% of remaining) - (5% of remaining).

Front

What is the formula for calculating depreciation?

Back

Depreciation = (Initial Value - Residual Value) / Useful Life.

Front

What is a sales tax?

Back

Sales tax is a tax imposed by the government on the sale of goods and services, usually calculated as a percentage of the sale price.

Front

How do you calculate the average annual depreciation of a car?

Back

Average annual depreciation = (Initial Purchase Price - Estimated Resale Value) / Number of Years Owned.

Front

What is the purpose of calculating total cost with tax?

Back

Calculating total cost with tax helps consumers understand the final amount they will pay for a product, including any additional government charges.

Front

What does 'list price' mean?

Back

List price is the manufacturer's suggested retail price (MSRP) for a product before any discounts or promotions.

Front

How do you apply multiple trade discounts?

Back

To apply multiple trade discounts, calculate each discount on the remaining amount after the previous discount has been applied.