## May 5, 2009

### Profit & Loss questions

A man decides to buy a nice horse. He pays \$60 for it, and he is
very content with the strong animal. After a year, the value of
the horse has increased to \$70 and he decides to sell the horse.
But already a few days later he regrets his decision to sell the
beautiful horse, and he buys it again. Unfortunately he has to pay
\$80 to get it back, so he loses \$10. After another year of owning
the horse, he finally decides to sell the horse for \$90.

What is the overall profit/loss the man makes?

Damien said...

-\$60+\$70-\$80+\$90 = \$20 profit

Secret Squïrrel said...

\$10 profit from each of the two sales, minus costs made up of two years of

Transport costs (including hiring a horse-trailer twice) : \$200
Water : \$10 (more if not connected to urban scheme)
Winter feed : \$2,000
Apple and carrot treats : \$200
Agistment : \$2,500
Horse care manual : \$50
A whole bunch of other horsey books : \$200
Washing and general care products : \$100
Horse blanket for cold nights : \$40
Vetinary fees and supplies : \$350
Farrier's fees : \$240
Bridle and bits : \$80
Second-hand saddle, tack and stirrups (even tho' they only get used once) : \$320
Cowboy boots and hat (well you have to look the part) : \$260
Repairs to NEIGHbour's fence after it got spooked : \$250
-----------------------------------
TOTAL COSTS : \$6,800

plus footage of the horse running thru the fence wins third prize in Funniest Home Video competition : \$1,000

10+10-6800+1000= LOSS of \$5,780

Philofsci said...

Gentlemen, gentlemen...

At what point does the question say that he ACTUALLY sold the horse?
It only says he DECIDES to sell the horse. One can decide to sell something without ever actually selling it!

So...

He pays 60 dollars. (-60)
Decides to sell. (-60)
"he buys it again" for 80. (-140)
decides to sell. (-140)

By only deciding to sell and not actually ever selling it combined with the dubious move of paying the original seller to buy the horse AGAIN, leads our indecisive cowboy to a total net loss of 140 dollars.

(this is of course not factoring in the 27% monthly interest charges on his Amazon rewards card, plus the points he acquired from the original purchase, minus 24 monthly minimums...)

Secret Squïrrel said...

Wondered where you'd got to.

What sort of horse has a value of only \$60-80? It'd be worth more than that as pet food. So, upon further consideration, given that you've established that the fellow is still in possession of the horse, I'd say that he got a bargain (both times) and is in front to the tune of \$(Real value of horse)-140.

Anonymous said...

He gets a 20 dollar profit

pays 60 which is a loss of 60 dollars,

Sells the horse for 70, gets all his 60 dollars back plus gets the extra ten dollars,

which leaves him at 70 dollars profit.

then, Pays 80 dollars which takes away the 70 dollars plus an extra 10 dollars which would leave him with a 10 dollar loss.

After a year he sold the horse for 90 which put him with 80 dollars.

He started with 60 and now has 80

80-60=20

Anonymous said...

well sir squirell u might not b knowin this, a few of animals have their dung used as renewable fuel.its gud to know that squirell's have sense of humour. (weird though)

talkin of the prob.in context we only look for no. of deals n the differenc between Cost and Sell price of the object. we have two deals each givin 10 as profit.so 2*10 = 20

Simmonsqcux said...

-\$60+\$70-\$80+\$90 = \$20 profit