A merchant purchased a jacket for $48 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 40 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant’s gross profit on this sale?	Pick one.
A) $ 0	B) $ 3	C) $ 4	D) $ 12	E) $ 16

Rationale: "actual cost = $ 48 sp = actual cost + mark up = actual cost + 40 % sp = 48 * 100 / 60 on sale sp = 80 / 100 ( 48 * 100 / 60 ) = 64 gross profit = $ 16 answer is e"
Answer: E