Mr. Tennyson, who is in the antique car business, sold two rare collector's cars for $60,000 each. He sold car A for 25 percent more than what he originally paid, but he took a loss on car B by selling it for 25 percent less than what he originally paid. Ignoring any business expenses, what was Mr. Tennyson's total net gain or loss. If any, on the sale of two cars?
a) loss of $2,500
b) loss of $8,000
c) gain of $2,500
d) gain of $8,000
e) There was neither a net gain nor a net loss.
Please assist with above problem.
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Mr. Tennyson, who is in the antique car business, sold two r
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alanforde800Maximus
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Since car A is sold for 1/4 above cost, the selling price of $60,000 is 5/4 of the cost of car A:alanforde800Maximus wrote:Mr. Tennyson, who is in the antique car business, sold two rare collector's cars for $60,000 each. He sold car A for 25 percent more than what he originally paid, but he took a loss on car B by selling it for 25 percent less than what he originally paid. Ignoring any business expenses, what was Mr. Tennyson's total net gain or loss. If any, on the sale of two cars?
a) loss of $2,500
b) loss of $8,000
c) gain of $2,500
d) gain of $8,000
e) There was neither a net gain nor a net loss.
60,000 = (5/4)A
240,000 = 5A
A = 48,000.
Since car B is sold for 1/4 below cost, the selling price of $60,000 is 3/4 of the cost of car B:
60,000 = (3/4)B
240,000 = 3B
B = 80,000.
Total revenue = (selling price of A) + (selling price of B) = 60,000 + 60,000 = 120,000.
Total cost = (cost of A) + (cost of B) = 48,000 + 80,000 = 128,000.
(total revenue) - (total cost) = 120,000 - 128,000 = -8,000.
Thus, there was a LOSS of $8,000.
The correct answer is B.
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Let’s let C = the original cost of each individual car. We can create the equation for the sale of the first car, which netted a 25% profit, as:alanforde800Maximus wrote: ↑Mon Oct 17, 2016 9:32 pmMr. Tennyson, who is in the antique car business, sold two rare collector's cars for $60,000 each. He sold car A for 25 percent more than what he originally paid, but he took a loss on car B by selling it for 25 percent less than what he originally paid. Ignoring any business expenses, what was Mr. Tennyson's total net gain or loss. If any, on the sale of two cars?
a) loss of $2,500
b) loss of $8,000
c) gain of $2,500
d) gain of $8,000
e) There was neither a net gain nor a net loss.
Please assist with above problem.
60,000 - C = 0.25C
60,000 = 1.25C
48,000 = C
So, he made 60,000 - 48,000 = 12,000 dollars.
The equation for the sale of the second car, which netted a 25% loss, is:
60,000 - C = -0.25C
60,000 = 0.75C
80,000 = C
So, he lost 80,000 - 60,000 = 20,000 dollars.
Thus, he had an overall loss of 8,000 dollars.
Answer: B
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