Subjects finance

Vat Exclusive Price

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Vat Exclusive Price


1. **Stating the problem:** We know the VAT-inclusive price of a pair of chinos is 750. We need to find the price before VAT (VAT-exclusive price). 2. **Understanding VAT:** VAT-inclusive price means the price already includes VAT. If the VAT rate is $r$ (in decimal form), and the VAT-exclusive price is $P$, then the VAT-inclusive price is given by: $$\text{VAT-inclusive price} = P (1 + r)$$ 3. **Assuming standard VAT:** Since the VAT rate is not given, we typically use a common VAT rate (for example, 15% or $r = 0.15$). If you have a specific rate, substitute accordingly. 4. **Calculate VAT-exclusive price:** Given VAT-inclusive price $= 750$, and VAT rate $r=0.15$: $$750 = P (1 + 0.15) = P \times 1.15$$ Divide both sides by 1.15: $$P = \frac{750}{1.15}$$ Evaluate: $$P \approx 652.17$$ 5. **Conclusion:** The VAT-exclusive price of the chinos is approximately 652.17.