Question

Ann, Bob, Carol, and Denis own a candy store. After a large argument, they decide to dissolve their partnership using the sealed bid method. Ann bids $320,000 for the store, Bob bids $440,000 for it, Carol bids $240,000 for it, and Denis bids $400,000 for it.

Required:
a. What is Bob's fair share?
b. What is Carol's fair share?
c. What is Denis's fair share?

Answer 1

Following are the solution to the given points:

Explanation:

`Ann=\$3,20,000\\\\Bob=\$4,40,000\\\\Carol=\$240,000\\\\Denis= \$4,00,000\\\\`

Each player's offer divided by the total number of players calculates the fair share

Ann's fair share
`= (\$320,000)/(4) = \$80,000\\\\`

Bob's fair share
`= (\$440,000)/(4) = \$110,000\\\\`

Carol's fair share
`= (\$240,000)/(4) = \$60,000\\\\`

Denis's fair share
`= (\$400,000)/(4) = \$100,000\\\\`

Because Bob has the highest bid, that receives in the business.

Payments:

Ann
`\$80,000` paid by estate

Bob
`= \$440,000 - \$110,000 = \$330,000` owes estate

Carol
`= \$60,000` paid by estate

Denis
`= \$100,000` paid by estate

Surplus
`= \$330,000 - (\$80,000+\$60,000+ \$100,000) = \$90,000`

Splitting the equally among the four players. therefore one of the each receives:

`(\$90,000)/(4)= \$22,500`

The final settlement of the Ann receives:

`= \$80,000+ \$22,500 = \$102,500`