Trade Discounts - TRADE DISCOUNTS A Simple Merchandising...

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TRADE DISCOUNTS A Simple Merchandising Chain As the product is sold along the chain, each member adds a MARKUP that increases the price. Sometimes a member offers a DISCOUNT to; Sell More Product Encourage Prompt Payment Sometimes the product may have a MARK DOWN due to; Competition Economic Conditions (Recession) TRADE DISCOUNT is a reduction of the CATALOGUE PRICE or LIST PRICE or SUGGESTED RETAIL PRICE Manufacturer Wholesaler Retailer Consumer
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NET PRICE = LIST PRICE – DISCOUNT Example 1 Determine the amount of the discount and the net price of an item listed at $200.00 and has a trade discount of 20%. Solution: Amount of the discount = Rate of Discount X List Price = 0.20 X $200.00 = $40.00 Net Price = List Price - Trade Discount = $200.00 - $40.00 = $160.00 NET PRICE FACTOR FOR COMPUTING THE NET PRICE There is an easier method of finding the net price by using the Net Price Factor (NPF). NET PRICE FACTOER (NPF)
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This note was uploaded on 08/22/2009 for the course MATH 1101 taught by Professor Tonycirusolo during the Fall '05 term at Niagara College.

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Trade Discounts - TRADE DISCOUNTS A Simple Merchandising...

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