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Planning Ahead Inventory is an important part of many businesses. Can you think of problems that might arise from having too much or too little of a product in stock?

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Lesson Objective Compute the trade discount, the net price, and the trade-discount rate. Content Vocabulary list price The price at which a business generally sells an item, also called the catalog price. trade discount trade-discount rate net price trade discount A discount from the list price. trade-discount rate The amount of the discount of an item expressed as a percentage of the list price. net price The price actually paid for a discounted item.

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Johnson Auto Repair Shop is purchasing an electronic ignition module for a sport coupe that is six years old. The list price in the wholesalers catalogue is $845. Johnson receives a 40 percent trade discount. What is the net price of the module? Example 1

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Find the trade discount. List Price × Trade-Discount Rate $845 × 40% = $338.00 Example 1 Answer: Step 1

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Find the net price. List Price – Trade Discount $845.00 – $338.00 = $507.00 Example 1 Answer: Step 2

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Murray Plumbing receives an 18 percent trade discount from their wholesale supply company. The list price on an item that Murray needs to purchase is $145.79. What is the net price? Practice 1

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$119.55 Practice 1 Answer

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Find the trade discount and the net price. List price: $105.59 Trade-discount rate: 32 percent Practice 2

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Trade discount: $33.79 Net price: $71.80 Practice 2 Answer

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