A contractor purchases materials for $15,000 in a state with 8.5% sales tax. The materials are used on a project where the contractor will charge the client $25,000 for materials markup. What is the contractor's net cost for materials?
Correct Answer
B) $16,275
Net cost includes the purchase price plus sales tax paid by the contractor. Sales tax = $15,000 × 8.5% = $1,275. Net cost = $15,000 + $1,275 = $16,275.
Why This Is the Correct Answer
Net cost includes the purchase price plus sales tax paid by the contractor. Sales tax = $15,000 × 8.5% = $1,275. Net cost = $15,000 + $1,275 = $16,275.
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