Question

2. Roland Overbow works at Up The River Motors. He recently got a new Kia Sorento into the dealership

that has a base price of $24,190 and options that cost $6.720 and had a destination charge of $747. If the
dealer's percent of MSRP is 90.5% and the dealer's percent of options is 88.2%.
What is the dealer's cost of the Kia Sorento?
a.
b. What is the sticker price of the Kia Sorento?
c. If Roland sold the SUV for the sticker price how much would he profit?

Answer 1

Explanation:

To answer these questions, we need to use the given information and the formulas:

Dealer cost = MSRP * (100% - dealer's percent of MSRP) + options cost * (100% - dealer's percent of options) + destination charge

Sticker price = Dealer cost / (100% - dealer's percent of MSRP)

Profit = Sticker price - Dealer cost

a. To find the dealer's cost of the Kia Sorento, we can plug in the given values into the formula for dealer cost:

Dealer cost = $24,190 * (100% - 90.5%) + $6,720 * (100% - 88.2%) + $747

Dealer cost = $2,352.95 + $805.68 + $747

Dealer cost = $3,905.63

So the dealer's cost of the Kia Sorento is $3,905.63.

b. To find the sticker price of the Kia Sorento, we can plug in the values we found in part (a) into the formula for sticker price:

Sticker price = $3,905.63 / (100% - 90.5%)

Sticker price = $41,219.00

So the sticker price of the Kia Sorento is $41,219.00.

c. To find the profit that Roland would make if he sold the SUV for the sticker price, we can use the formula for profit:

Profit = $41,219.00 - $3,905.63

Profit = $37,313.37

So if Roland sold the SUV for the sticker price, he would make a profit of $37,313.37.