After he buys and sells the goat and makes a $10 profit, that transaction is now moot and not connected to any past or furture transactions. He now buys that goat or another goat for $80 and sells it for $90 and makes another $10. So he has no goats and $20 in his pockets but the experience gained is priceless. Anybody out there buying second-hand goats? I've got a deal for you.
He ends up with $20 more than he started with no matter how you look it. Call it a “gain”, call it “more”, call it “profit”. He’s up $20.
Yes and that's why he got $20 profit. The fact that the second time he bought for more money than the first is irrellevant because it could be another item altogether and he made $10 on it.
I agree. The two transaction pairs are separate events.
David, my grandson is in the sixth grade in Fate (near Rockwall) and studying for the Starr test. If I put some of the questions in the study booklet on here, it would keep this thread going for quite some time!! A bit more sophisticated than what I was expected to handle in the sixth grade.
$30 profit. Started with $60 cash and no goat. Wound up with $90 cash and no goat.I have recalculated, dand my answer now is#0. Usoing this approach: Start with $100-60+70-80+90=120. Started with $100, so profit is $20.
A man buys a goat for $60. Then he sells it for $70. Then he buys it back for $80 And sells it again for $90
How much profit did he make?
First transaction gross -$60 net -$60 Second transaction gross +$70 net +$10 Third transaction gross -$80 net -$70 Final transaction gross +$90 net +$20
Yes and that's why he got $20 profit. The fact that the second time he bought for more money than the first is irrellevant because it could be another item altogether and he made $10 on it.
Sorry, I don’t follow that all. I don’t see how the second transaction is irrelevant or how it can be separated. Both transactions are important. The question was: “How much profit did he make?” and the answer is $20. Work thru the math on this as if you started with $100 in cash. At the end you’ll have $20 more than when you started. If you end up with more than you started with you’ve made a profit.
He lost 20$ on the whole transaction which was gained by the other guy. -----------------------------------------------
Or most probably this way:
Guy has goat & sell for $60 Guy have $60
Guy wants milk so went to buy the goat back. But 60 not enough because seller wants $70 Guy borrows 10 from bank and add to his 60 to buy goat.
Guy now have a goat and bank debt of $10 Goat is male, no milk so Guy sell it for $80
Guy have $80 but is now hungry for meat Guy wants to buy goat but the buyer already butcher it and will only sell for $90
Guy borrows again another $10 to add to his $80 and bought a piece of goat.
So now Guy has 12lbs of goat and $20 of debt.
But is not actually true because to borrow $10 from a bank, Guy really needs to borrow $10.2 He gets the 10 and bank keeps the 0.2 as upfront interest payment.
So he really owe the bank $20.4 for the two borrows. But he choose 12 months payment so he would actually pay the bank $40 for the compounding interest.
So in reality, in the end, Guy has a 9lbs of goat meat, 3lbs of goat bones and $40 debt.
Lets have a look from the other side: br br Man h... (show quote)
I believe that he made $20, purchases $60 plus $80 = $14, sales $70 plus $90 = $160. Look at it another way, he made a profit of $10 out of each of the two transactions. Think of it as being two separate goats.
$20 is the correct answer. The first transaction made $10 and was complete. The second also made $10 and was totally independent of the second one (as if the first never occurred). D
$20 is the correct answer. The first transaction made $10 and was complete. The second also made $10 and was totally independent of the second one (as if the first never occurred). D
But if “the first never occurred” the profit would be $10 not $20 which, as you stated, is the correct answer.