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The price at which a product is purchased from China is $25. The actual retail price of the product at a Wal-Mart store is $36. If a 12% discount is being offered, the prize at which the product is being sold is 36*(1 - 0.12) = $31.68
The credit card company deducts 3.2% for the use of its payment gateway. The cost incurred per item is $31.68*0.032 = 1.01376.
The cash inflow for each item sold is 31.68 - 1.01376 = 30.66624. The profit made is 5.66624. This is 22.66% of the price at which the item is procured from China.
Wal-Mart makes a 22.66% profit on the sale of the product
Each product is placed on Walmart's shelf with a $36 price tag. The product is sold at a 12% discount, meaning that it now costs 88% of what it did initially.
36 `* ` 88% = 36 ` *` .88 = $31.68
Then the credit card company offer a 3.2% discount. This means that the customer pays 96.8% of the original price.
31.68 ` *` 96.8% = 31.68 `* ` .968 = $30.66624
Walmart paid $25 dollars for the product. The profit made will be: 30.66624 - 25 = $5. 66624
In order to determine the percentage of profit, the value of profit must be divided by Walmart's cost to purchase the product, then multiplied by 100% (to convert the number from a decimal to a percentage).
5.66624 / 25 = .2266496
.2266496 `* ` 100% = 22.66496%, when rounded = 22.7%
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