Amy
Bob
Cara
Luxury Car
183,000
198,000
210,000
Yacht
2,100,000
2,130,000
2,070,000
House
5,100,000
5,010,000
5,040,000
Total Value of the Items
7,383,000
7,338,000
7,320,000
Fair Share
2,461,000
2,446,000
2,440,000
Initial Settlement
House
2,461,000
Yacht
(316,000)
Luxury Car
(2,230,000)
Final Settlement
House
2,432,667
Yacht
287,667
Luxury Car
2,201,667
Method of Sealed Bids
1.
Identify which clients will receive each item based on the bids and find the value of each client’s
fair share.
a.
Cara receives the luxury car. Bob receives the Yacht. Amy receives the house.
b.
Amy total bid total is 7,383,000 this comes from 183,000+2,100,000+5,100,00=
7,383,000. Bob total bid equals 7,338,000. 198,000+2,130,000+5,010,000= 7,338,000.
Cara total equals 7,320,000 this amount comes from the sum pf
210,000+2,070,000+5,040,000= 7,320,000.
c.
Fair Share for each person
i.
Amy- 7,383,000/3= 2,461,000
ii.
Bob- 7,338,000/3= 2,446,000
iii.
Cara- 7,320,000/3= 2,440,000
2.
Describe the initial settlement (which client received which item and how much they owe the
estate).
a.
Initial Settlement
i.
Amy- House and owes 2,461,000 because when you subtract the Fair share from
the price of house it gives you the 2,461,000
ii.
Bob- Yacht and is owed 316,000 also we subtract the fair share from the price of
the yacht It gives you the number of 316,000
iii.
Cara- Luxury Car and is owed (2,230,000) Cara is owed this because we
subtracted the fair share- the amount of the car which gives what Cara is owed.
3.
Find the surplus after the first settlement is over.
a.
Surplus
b.
I added subtracted all three initial settlement and gave me a -28,333 which is how I got
the surplus for these three people
i.
Amy- House and owes 2,432,667
ii.
Bob- Yacht and is owed 287,667
iii.
Cara- Luxury car is owed 2,201,667
4.
In one paragraph describe the final settlement
