A shopkeeper marked his goods 40% higher than their cost price and allows 20% discount on every item. Find his net profit percentage.

12%

Cost Price = C

Marked Price (M) is 40% higher = 1.4C

Discount on M is 20%= 0.2*M

Selling Price = M-0.2M = 0.8M

Profit = 0.8M-C = 0.8*(1.4C) - C = 1.12 C

Profit% = 1.12C *100 / C = 12

The correct answer is Option (3) → 12%