Profit and loss:
Basic definitions:
• Cost price (C.P.): This is the price at which an article is purchased.
• Selling price (S.P.): This is the price at which an article is sold.
• Profit or Gain: If the selling price is more than the cost price, the difference between them is the profit incurred.
Profit or Gain = S.P. - C.P.
• Loss: If the selling price is less than the cost price, the difference between them is the loss incurred.
Loss = C.P. - S.P.
• Profit or loss is always calculated on the cost price.
• Marked price: This is the price marked as the selling price on an article, also known as the listed price.
• Discount or Rebate: This is the reduction in price offered on the marked or listed price.
Below is the list of some basic formulae
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If there is a loss of 40%, approximately what is the value of n?
Solution:
Let the price of each pen be Re. 1.
Then the cost price of n pens is Rs. n and the selling price of n pens is Rs. 10.
Loss = n-10.
Loss of 40% (loss/CP)*100 = 40
Therefore, [(n-10)/n]*100 = 40 n = 17 (appro.)
6) A dishonest merchant sells his grocery using weights 15% less than the true weights and makes a profit of 20%. Find his total gain percentage.
Solution:
Let us consider 1 kg of grocery bag. Its actual weight is 85% of 1000 gm = 850 gm.
Let the cost price of each gram be Re. 1. Then the CP of each bag = Rs. 850.
SP of 1 kg of bag = 120% of the true CP
Therefore, SP = 120/100 * 1000 = Rs. 1200.
Gain = 1200 – 850 = 350
Hence Gain% = 350/850 * 100 = 41.17%
7) A man bought two bicycles for Rs. 2500 each. If he sells one at a profit of 5%, then how much should he sell the other so that he makes a profit of 20% on the whole?
Solution:
Before we start, it’s important to note here that it is not 15% to be added to 5% to make it a total of 20%.
Let the other profit percent be x.
Then, our equation looks like this.
(105/100) * 2500 + [(100+x)/100] * 2500 = 120/100 * 5000 x=
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So the article was marked at Rs. 6000.
Cost price of the article = [100/(100+80)]*3600 = Rs. 2000.
It is important to note here that this DOES NOT equal to a 45% discount on the whole. When different discounts are applied successively, they CANNOT be added.
Solve the following:
1) If the loss incurred in a transaction is 3/5th of the selling price, find the loss percent.
a) 37
b) 37.5
c) 37.75
d)none
Answer: b
Explanation:
Let the selling price be x. loss is 3x/5.
Cost price = Selling price + loss = x + 3x/5 = 8x/5
Loss% = (3x/5) / (8x/5) * 100 = 37.5%
2) After applying successive discounts of 10% and 5% on an article, it was sold at Rs. 513. Find the marked price of the article.
a) Rs. 590
b) Rs. 600
c) Rs. 603.5
d) None
Answer: b
Explanation:
90/100 * 95/100 * x = 513 x = 600
3) A sells a set of books to B for Rs. 300 at a profit of 25%. B sells it to C at a loss of 10%.
i) What was the original price paid by A? ii) What was the price paid by C to B?
a) 240, 260
b) 250, 270
c) 250, 260
d) 240, 270
Answer : d
Explanation:
i) Price paid by A (cost price paid by A) = [100/(100+25)]*300 = Rs. 240 ii) Price paid by C (Selling price by B to C) = [(100-10)/100]*300 = Rs.
John Mortimer controls Watson & Musico Developments and is well known for his abrasive style and aggressive approach in business dealings. His firm is rumoured to have a highly restricted cash flow because of its aggressive leasing policy. Because of the depressed real estate market, Mortimer is refinancing all of its properties to reduce its debt service requirements and to generate cash. Since, the amount that could be borrowed from the bank is positively correlated with the appraised value, Mortimer would like his property to be valued as high as possible. Therefore, he would want Richard to value his property at his requested value of $35 million.
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The sales director proposed that if the firm were to reduce the price of Item 345 to FF15.00/m, they would be able to increase sales to 175,000 units (or 25% of industry volume). But if they were to keep the price at the current value of FF20.00/m, they would be able to sell not less than 75,000 units (or 11% of industry volume).
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