Puzzling Profits: Newsletter Challenge (July 2020)

GA

Then there are the other unknown costs of storage, fees, utilities, repairs (did he really resell a known defective bike?), etc.

After selling to Eddy, Lance has $100

After buying it back from Eddy, Lance has $20

After selling to Bernard, Lance has $110

His profit depends on what the bike was worth, what Lance originally paid for it. (If he stole it, his first profit was $100.)

On the second transaction, he lost $20.

On the third transaction, he made $30.

If X is the value of the bike, total profit is X - 100 - 20 + 30 or X - 90

Fair market value for the bike must be established...since it last sold for $90, that is the established market value...So the profit is $20...

I like your thinking. GA.

Lance -> Eddy, X = original cost, profit = $100 – X or X - $100 = loss.

Eddy -> Lance, profit = $120 – X or (X+$20) - $100 = loss or profit or even?

Lance -> Bernard, (same bike = no repairs?) profit $130 – X or (X+$30) -$100. as above.

Answer, Lance total profit has three possibilities (1) profit, (2) loss, (3) even.

Apart from the normal profit made on a sale of $100/- he made an additional profit of $20/- when he got it returned at a depreciated price of $80/-

Taking for granted that the mechanical issues were sorted out without any capital expenses, by the second sale he made a profit of $10/-

Thus the total profit made was $30/- Plus the original profit (Secret and hence not divulged in the riddle)

Once the three possible profits are calculated it then depends on what Lance's local tax man extracts from Lance's lucrative sideline in selling bikes.

Lance makes nothing, only bernard and eddy make a profit. Lance, after receiving the bike back from eddy due to serious mechanical issues, then sells bike to bernard without disclosing them. Bernard subsequently sustains an injury after the front wheel falls off and his lawyer, with the aid of Eddie's disposition, successfully sue lance for every nickel he's got.

Doorman’s got it as succinctly correct as possible. Ignoring the time value of money, Lance’s profit from two sales is $100 minus what the bike originally cost him (which we don’t know from the narrative and was the first sale), plus $10 from the second rip-off sale of a defective product.

Good choice of name for a cheat selling a bike!!!

Funnily enough his name was Lance Edward.... so maybe the first two transactions were irrelevant to the final answer, or some way to create a tax write off.

Maybe Eddie bought this bike from Lance in which case it was a steal.

Answer is posted.