A merchant purchased a jacket for $54 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 40 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale? Options.
A) $0 B) $3 C) $4 D) $12 E) $18
Actual Cost = $54   SP = Actual Cost + Mark up   = Actual Cost + 40% SP   = 54*100/60   on sale SP = 80/100(54*100/60) = 72   Gross profit = $18   Answer is $18
<result>E</result>
A merchant purchased a jacket for $54 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 40 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?