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Hi,
I’ve noticed quite a few mistakes in this BPP revision kit. In Q40 Stay Clean part B I can’t get the same answer as the book in the lost discount calculation. Instead of $1,063,158 for the current buying gross cost – I’m getting (Net cost $1,010,000 * Discount 1.05) $1,060,500? Maybe I’m calculating it wrong. Please help.
Thanks.
You cannot take 1.05, as it is a net amount and to get a gross your percentage should be less than or equal to 100%
Moreover the percentage of a discount should be on actual amount(gross) so discount is 0.05 of gross amount. Therefore net amount is 95% of gross. Net amt. = 0.95x so net/0.95 is gross amount
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