How to Calculate VAT-Inclusive Price for Building a Boundary

What is the VAT-inclusive price for building the boundary if the VAT rate is 15%?

a) RIZ 805 b) RIZ 700 c) RIZ 805 (rounded to the nearest RIZ) d) RIZ 645

Answer:

The VAT-inclusive price for building the boundary, when the VAT rate is 15%, is calculated by adding the VAT amount (15% of RIZ 700) to the original quoted price. The total comes to RIZ 805.

To calculate the VAT-inclusive price for building a boundary, you need to understand how VAT (Value Added Tax) works. In this case, a builder quoted RIZ 700 to build a boundary, excluding VAT at a rate of 15%. VAT is calculated as a percentage of the original price.

In this scenario, the VAT rate is 15%. To determine the VAT amount that needs to be added to the original quoted price, you multiply the original price by the VAT rate (15%).

Original Quoted Price: RIZ 700 VAT Rate: 15%

Calculation: VAT Amount = Original Price x VAT Rate VAT Amount = RIZ 700 x 0.15 VAT Amount = RIZ 105

Therefore, the VAT amount to be added to the original quoted price is RIZ 105. By adding this VAT amount to the original price, you get the VAT-inclusive price:

VAT-Inclusive Price = Original Price + VAT Amount VAT-Inclusive Price = RIZ 700 + RIZ 105 VAT-Inclusive Price = RIZ 805

Therefore, the correct answer is option a) RIZ 805 (rounded to the nearest RIZ). This calculation helps you understand how VAT is added to a quoted price to determine the total cost inclusive of tax.