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Sir i have not understand how they calculate maximum discount that could be offered .
It is a past exam question called WQZ Co (12/2010)I assume you are happy with the previous part of the answer where the savings from giving the discount were calculated as $1,050,000.
So the maximum discount they can give is $1,050,000.
Only 25% of customers would take the discount so the revenue from them is 25% x 87.6M = 21.9M
So in % terms the maximum discount they can off is 1,050,000 / 21.9M = 4.8%
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