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What is the trade discount rate

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Question - A General Motors incentive program designed to reduce inventory of certain low-selling models offers a PhP7,000 extra dealer incentive for each of these vehicles that the dealer moved into its  rental or service fleets. As the accountant for a dealership with a number of these vehicles left in stock, your manager has asked you to calculate certain invoice figures. The normal trade discount from GM is 18%. If the average sticker price (list price) of these remaining vehicles at your dealership in PhP23,500, calculate the following.

a. What is the amount of the trade discount, including the incentive?

b. What is the trade discount rate? Round to the nearest tenth of a person.

c. What is the net price (invoice price) to your dealership?

d. If the cars were then sold from the fleets at PhP1,000 over "invoice" (net price), what is the  total percentage savings to the consumer based on the lists price? Round to the nearest tenth of a person.

e. Although these incentive prices reflect extraordinary discounts to the consumer, what other  factors should a consumer consider before purchasing a "discontinued" brand of vehicle?

Reference no: EM132992375

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