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I am confused

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Manager
Joined: 26 Jun 2009
Posts: 66
Followers: 1

Kudos [?]: 7 [0], given: 2

I am confused [#permalink]  19 Aug 2009, 13:22
00:00

Difficulty:

5% (low)

Question Stats:

75% (02:13) correct 25% (00:39) wrong based on 4 sessions
A merchant purchased a jacket for \$60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?
(A) \$0
(B) \$3
(C) \$4
(D) \$12
(E) \$15

[Reveal] Spoiler:
OA is C
Intern
Joined: 30 Dec 2008
Posts: 20
Schools: Ross 2012
Followers: 0

Kudos [?]: 1 [0], given: 2

Re: I am confused [#permalink]  19 Aug 2009, 13:56
IMO A.

Selling price = 60(1.25) = 75

discounted price = 80 % of 75 = 75 * .8 = 60

Gross Profit = discounted price - original cost = 60 - 60 = 0.
Manager
Joined: 26 Jun 2009
Posts: 66
Followers: 1

Kudos [?]: 7 [1] , given: 2

Re: I am confused [#permalink]  19 Aug 2009, 14:02
1
KUDOS
The question says : selling price is equal to purchase price plus 25% of selling price.
So it cant be 25% of 60
Intern
Joined: 30 Dec 2008
Posts: 20
Schools: Ross 2012
Followers: 0

Kudos [?]: 1 [0], given: 2

Re: I am confused [#permalink]  19 Aug 2009, 14:23
nice point...I forgot to read the question properly.

IMO is C based on that point..
Manager
Joined: 13 Jan 2009
Posts: 172
Followers: 4

Kudos [?]: 14 [0], given: 9

Re: I am confused [#permalink]  19 Aug 2009, 20:14
skg wrote:
The question says : selling price is equal to purchase price plus 25% of selling price.
So it cant be 25% of 60

Hoa can you determine what was the selling price?
Manager
Joined: 09 Aug 2009
Posts: 57
Followers: 1

Kudos [?]: 4 [0], given: 1

Re: I am confused [#permalink]  19 Aug 2009, 22:51
cp=\$60
sp=\$60+0.25(s.p)
0.75sp = \$60
sp = \$80

+1 for C

/Prabu
Manager
Joined: 28 Jul 2009
Posts: 126
Location: India
Schools: NUS, NTU, SMU, AGSM, Melbourne School of Business
Followers: 6

Kudos [?]: 48 [0], given: 12

Re: I am confused [#permalink]  20 Aug 2009, 23:57
skg wrote:
A merchant purchased a jacket for \$60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?
(A) \$0
(B) \$3
(C) \$4
(D) \$12
(E) \$15

Easy one. Let SP be x.
CP= 60\$
SP = x = 60 + (.25)x
x = 80.
SP after discount was (0.8)x = 64. Therefore, 4\$ profit.
_________________

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Will do anything for Kudos! Please feel free to give one.

Manager
Joined: 10 Jul 2009
Posts: 131
Location: Ukraine, Kyiv
Followers: 2

Kudos [?]: 22 [0], given: 60

Re: I am confused [#permalink]  20 Sep 2009, 07:49
tricky and good question.

C

selling price=60+x
x=1/4selling price
thus
selling price=80
discount of 20% =16.
80-16-60=4
_________________

Never, never, never give up

Manager
Joined: 04 Sep 2009
Posts: 53
WE 1: Real estate investment consulting
Followers: 1

Kudos [?]: 16 [0], given: 7

Re: I am confused [#permalink]  20 Sep 2009, 10:19
skg wrote:
The question says : selling price is equal to purchase price plus 25% of selling price.
So it cant be 25% of 60

C indeed

Kudos skg for reminding to really read carefully into the questions!
Re: I am confused   [#permalink] 20 Sep 2009, 10:19
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