To calculate the Net Price Factor and Net Price, we can follow these steps:

1. Formula for Net Price Factor:

The Net Price Factor (NPF) is calculated by multiplying the complements of the trade discount rates: $\text{Net Price Factor} = (1 - r_1) \cdot (1 - r_2) \cdot (1 - r_3)$ where $r_1, r_2, r_3$ are the trade discount rates expressed as decimals.

2. Formula for Net Price:

$\text{Net Price} = \text{List Price} \cdot \text{Net Price Factor}$

Given Values:

• List Price: $0.59
• Trade Discount Rates: 20%, 9%, 4% (as decimals: 0.20, 0.09, 0.04)

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Step 1: Calculate Net Price Factor

$\text{Net Price Factor} = (1 - 0.20) \cdot (1 - 0.09) \cdot (1 - 0.04)$ $\text{Net Price Factor} = 0.80 \cdot 0.91 \cdot 0.96$ $\text{Net Price Factor} \approx 0.69888 \; (\text{rounded to five decimal places})$

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Step 2: Calculate Net Price

$\text{Net Price} = 0.59 \cdot 0.69888$ $\text{Net Price} \approx 0.41234 \; (\text{rounded to nearest cent: } 0.41)$

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Final Answers:

• Net Price Factor: 0.69888
• Net Price: $0.41

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Do you have any questions or need further clarification? Here are some related questions to explore:

1. How do trade discounts affect the profitability of a product?
2. What is the difference between trade discount and cash discount?
3. How is the net price factor useful for financial forecasting?
4. Can net price factors exceed 1? Why or why not?
5. How can businesses optimize trade discount rates for better sales?

Tip: Always double-check discount calculations, especially when applying them sequentially, to avoid compounding errors.