Nothing.
A file named output.txt in the current subdirectory
will be replaced with a new file,
but not a file in any other subdirectory.
Here is a (slightly) more realistic program that computes the discounted price, given the list price and the percentage discount:
import java.io.*;
class Discount
{
  public static void main ( String[] args ) throws IOException
  {
    int listPrice;
    int discount;
    int discountPrice;
    String line;
    BufferedReader stdin = new BufferedReader( 
        new InputStreamReader( System.in ) );
    System.out.println("Enter list price in cents:");
    line = stdin.readLine();
    listPrice = Integer.parseInt( line );
    System.out.println("Enter discount in percent:");
    line = stdin.readLine();
    discount = Integer.parseInt( line );
    discountPrice = listPrice - (listPrice*discount)/100 ;
    System.out.println( "Discount Price: " + discountPrice );
  }
}
Here is an example of the normal operation of this program:
C:\users\default\JavaLessons>java Discount Enter list price in cents: 100 Enter discount in percent: 10 Discount Price: 90 C:\users\default\JavaLessons>