EgmatQuantExpert wrote:

Solution

Given:• List price = purchase price + mark-up = cost price + 40% of selling price

• Discount = 20% of the selling price

To find:• Profit, as a percentage of the purchase (cost) price

Approach and Working: Let us assume the cost price to be c and selling price to be x

• List price = c + \(\frac{2x}{5}\)

On the list price, discount given = 20% of selling price = \(\frac{x}{5}\)

• Hence, selling price after discount = \(c + \frac{2x}{5} – \frac{x}{5} = c + \frac{x}{5}\)

Now, as we assumed the selling price to be x, we can say \(x = c + \frac{x}{5}\)

Hence, profit percentage = (x – \(\frac{4x}{5}\))/(\(\frac{4x}{5}\)) * 100 = 25%

Hence, the correct answer is option E.

Answer: EI am a bit confused as to the question and the solution provided.

Using picking number strategy.

Given:• List price = purchase price + mark-up = cost price + 40% of selling price

• Discount = 20% of the selling price

To find:• Profit, as a percentage of the purchase (cost) price

Approach and Working: Lets assume list price is $10.

• List price = cost price + 40% of selling price

$10 = $6 + $4

But with a 20% discount, a ($2) discount, the new formula should be

• Old List price - Discount = cost price + 40% of selling price - discount

$10 - $2 = $6 + $4 - $2

• Since the discount is coming from the shop owner's pocket, it should come from his profit

$8 = $6 + $2

Should the new list price be $8, and the cost price and profit be be $6 and $2 respectively?

From

EgmatQuantExpert solution provided, it seems that not only does the List Price not change, but the cost price went up also? Not sure why the owner providing the discount will lead the manufacturer to raise the cost price

• List price = cost price + 40% of selling price

$10 = $6 + $4

But with a 20% discount, a ($2) discount, the new formula should be

• List price = cost price + 40% of selling price - discount

$10 = $C + $4 - $2

$10 = $C + $2

$C = $10 - $2

I dont think any where in the question does it mention that Selling Price remains constant despite providing a discount, and the cost change as a result.

Please let me know where the logic gap is.